nvcsrs
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: 811-21614
Eaton Vance Enhanced Equity Income Fund
(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
(registrants Telephone Number)
September 30
Date of Fiscal Year End
March 31, 2010
Date of Reporting Period
S e m i a n n u a l R e p o r t M a r c h 3 1 , 2 0 1 0 EATON VANCE ENHANCED EQUITY INCOME FUND |
IMPORTANT
NOTICES REGARDING DISTRIBUTIONS,
DELIVERY OF SHAREHOLDER DOCUMENTS,
PORTFOLIO HOLDINGS AND PROXY VOTING
Managed Distribution Plan. On March 10, 2009,
the Fund received authorization from the Securities and Exchange
Commission to distribute long-term capital gains to shareholders
more frequently than once per year. In this connection, the
Board of Trustees formally approved the implementation of a
Managed Distribution Plan (MDP) to make monthly cash
distributions to common shareholders, stated in terms of a fixed
amount per common share.
The Fund intends to pay monthly cash distributions equal to
$0.1164 per share. You should not draw any conclusions about the
Funds investment performance from the amount of these
distributions or from the terms of the MDP. The MDP will be
subject to regular periodic review by the Funds Board of
Trustees.
With each distribution, the Fund will issue a notice to
shareholders and an accompanying press release which will
provide detailed information required by the Funds
exemptive order. The Funds Board of Trustees may amend or
terminate the MDP at any time without prior notice to Fund
shareholders. However, at this time there are no reasonably
foreseeable circumstances that might cause the termination of
the MDP.
Delivery of Shareholder Documents. The Securities
and Exchange Commission (the SEC) permits funds to
deliver only one copy of shareholder documents, including
prospectuses, proxy statements and shareholder reports, to fund
investors with multiple accounts at the same residential or post
office box address. This practice is often called
householding and it helps eliminate duplicate
mailings to shareholders.
Eaton Vance, or your financial adviser, may household the
mailing of your documents indefinitely unless you instruct Eaton
Vance, or your financial adviser, otherwise.
If you would prefer that your Eaton Vance documents not be
householded, please contact Eaton Vance at
1-800-262-1122,
or contact your financial adviser.
Your instructions that householding not apply to delivery of
your Eaton Vance documents will be effective within 30 days
of receipt by Eaton Vance or your financial adviser.
Portfolio Holdings. Each Eaton Vance Fund and its
underlying Portfolio(s) (if applicable) will file a schedule of
portfolio holdings on
Form N-Q
with the SEC for the first and third quarters of each fiscal
year. The
Form N-Q
will be available on the Eaton Vance website at
www.eatonvance.com, by calling Eaton Vance at
1-800-262-1122
or in the EDGAR database on the SECs website at
www.sec.gov.
Form N-Q
may also be reviewed and copied at the SECs public
reference room in Washington, D.C. (call
1-800-732-0330
for information on the operation of the public reference room).
Proxy Voting. From time to time, funds are required
to vote proxies related to the securities held by the funds. The
Eaton Vance Funds or their underlying Portfolios (if applicable)
vote proxies according to a set of policies and procedures
approved by the Funds and Portfolios Boards. You may
obtain a description of these policies and procedures and
information on how the Funds or Portfolios voted proxies
relating to portfolio securities during the most recent
12 month period ended June 30, without charge, upon
request, by calling
1-800-262-1122.
This description is also available on the SECs website at
www.sec.gov.
Please refer to the inside back
cover of this report for an important notice about
the privacy policies adopted by the Eaton Vance
organization.
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Eaton Vance Enhanced Equity Income Fund as of March 31, 2010 |
I N V E S T M E N T U P D A T E |
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Economic and Market Conditions
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Domestic equities remained on an upward path during the six months ending March 31, 2010, recording their fourth consecutive |
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Walter
A. Row,
CFA Eaton Vance Management
Co-Portfolio Manager
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quarter of gains. But the strong rally that began in March 2009
also started to slow somewhat in early 2010.
In fact, market momentum stalled in February, as concerns about sovereign debt in Greece and other
European economies, along with some belt-tightening in China, pushed stock prices
lower. By period end, however, equities were back on the rise, and
the S&P 500 Index finished the six months up 11.75%1. |
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Michael A. Allison, CFA
Eaton Vance Management
Co-Portfolio Manager
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The trends that helped equities stage their 2009 recovery continued to provide a favorable market
backdrop. The battered U.S. economy showed signs of recovery from recession, and corporate earnings
were strong, with expectations of acceleration. But
these gains also came with volatility. In addition to debt fears from some overseas markets,
equity investors grew anxious about an increasingly unsettled political environment at home,
including a massive health-care reform initiative and proposed |
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regulation of the financial services
industry. |
Past performance is no guarantee of future
results. Returns are historical and are
calculated by determining the percentage change
in net asset value or market price (as
applicable) with all distributions reinvested.
The Funds performance at market price will
differ from its results at NAV. Although market
price performance generally reflects investment
results over time, during shorter periods,
returns at market price can also be affected by
factors such as changing perceptions about the
Fund, market conditions, fluctuations in supply
and demand for the Funds shares, or changes in
Fund distributions. The Fund has no current
intention to utilize leverage, but may do so in
the future through borrowings and other permitted
methods. Investment return and principal value
will fluctuate so that shares, when sold, may be
worth more or less than their original cost.
Performance is for the stated time period only;
due to market volatility, the Funds current
performance may be lower or higher than the
quoted return. For performance as of the most
recent month end, please refer to
www.eatonvance.com.
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.
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Value stocks generally outperformed growth stocks during
the six-month period, particularly in the mid- and
small-capitalization ranges. Mid-cap stocks led the
markets advance, although the small-, mid- and
large-cap segments all posted solid returns. |
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The Fund is a closed-end fund and trades on the New
York Stock Exchange (NYSE) under the symbol EOI. For
the six months ending March 31, 2010, the Funds return
at net asset value (NAV) underperformed that of the S&P
500 Index, but it outpaced the CBOE S&P 500 BuyWrite
Index and the average return of the funds in its Lipper
peer group. As of March 31, 2010, the Fund was trading at
a premium to NAV of 0.21%. |
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The Funds common stock holdings performed roughly in line with the S&P 500 Index for the six-month
period, with gains from sector and industry allocations offsetting the lions share of losses from
individual stock selection. Underweighted allocations to the electric utilities and diversified
telecommunication industries, both of which had anemic results, contributed to the Funds relative
performance versus the S&P 500 Index, as did overweighted positions in the more-robust
Internet/catalogue retail and machinery |
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Total Return Performance 9/30/09 3/31/10 |
NYSE Symbol |
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EOI |
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At Net Asset Value (NAV) |
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10.34 |
% |
At Market Price |
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8.68 |
% |
S&P 500 Index1 |
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11.75 |
% |
CBOE S&P 500 BuyWrite Index1 |
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9.24 |
% |
Lipper Options Arbitrage/Options Strategies
Average1 |
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9.80 |
% |
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Premium/(Discount) to NAV (3/31/10) |
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0.21 |
% |
Total Distributions per share |
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$ |
0.760 |
Distribution Rate2 |
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At NAV |
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9.96 |
% |
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At Market Price |
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9.93 |
% |
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See page 3 for more performance information.
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1 |
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It is not possible to invest
directly in an Index or a Lipper
Classification. The Indices total returns
do not reflect commissions or expenses that
would have been incurred if an investor
individually purchased or sold the
securities represented in the Indices. The
Lipper total return is the average total
return, at net asset value, of the funds
that are in the same Lipper Classification
as the Fund. |
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2 |
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The Distribution Rate is based on
the Funds last regular distribution per
share (annualized) in the period divided by
the Funds NAV or market price at the end
of the period. The Funds monthly
distributions may be composed of ordinary
income, net realized capital gains and
return of capital. |
1
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Eaton Vance Enhanced Equity Income Fund as of March 31, 2010 |
I N V E S T M E N T U P D A T E |
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industries. Security selection in the oil, gas and consumable fuels
industry, as well as
in insurance and semiconductors/semiconductor
equipment, also aided relative performance. |
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Conversely, inopportune security selection in the metals and mining, health care
equipment/supplies, and capital markets industries was a drag on relative performance, essentially
erasing the gains realized through favorable sector and industry allocation. |
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As of March 31, 2010, the Fund had written call options on approximately 60% of its equity
holdings. The Fund seeks to generate current earnings from options premiums by selling covered call
options on a substantial portion of its portfolio securities. Option premiums can vary with
investors expectations of the future volatility (implied volatility) of the underlying assets.
While individual and overall stock market volatility have decreased from peak levels seen in late
2008, they remained significantly higher than the long-term average during the semi-annual period
that ended on March 31, 2010. |
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While the Funds options strategy lowered volatility during the six-month period, it modestly
detracted from relative performance given the equity markets strong advances during the period. |
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During the period, Eaton Vance Management (EVM) terminated its investment sub-advisory agreement
with Rampart Investment Management Company, Inc., with respect to the Fund and, effective October
20, 2009, EVM assumed responsibility for managing the Funds options strategy. |
The views expressed throughout this report are
those of the portfolio managers and are current
only through the end of the period of the report
as stated on the cover. These views are subject
to change at any time based upon market or other
conditions, and the investment adviser disclaims
any responsibility to update such views. These
views may not be relied on as investment advice
and, because investment decisions for a fund are
based on many factors, may not be relied on as
an indication of trading intent on behalf of any
Eaton Vance fund. Portfolio information provided
in the report may not be representative of the
Funds current or future investments and may
change due to active management.
2
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Eaton Vance Enhanced Equity Income Fund as of March 31, 2010 |
F U N D P E R F O R M A N C E |
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NYSE Symbol: |
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EOI |
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Average Annual Total Returns (at market price, NYSE) |
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Six Months |
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8.68 |
% |
One Year |
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54.93 |
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Five Years |
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3.03 |
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Life of Fund (10/29/04) |
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4.12 |
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Average Annual Total Returns (at net asset value) |
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Six Months |
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10.34 |
% |
One Year |
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37.08 |
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Five Years |
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3.61 |
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Life of Fund (10/29/04) |
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4.08 |
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1 Six-month returns are cumulative.
Other returns are presented on an average
annual basis. |
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Past performance is no guarantee of future
results. Returns are historical and are
calculated by determining the percentage change
in net asset value or market price (as
applicable) with all distributions reinvested.
The Funds performance at market price will
differ from its results at NAV. Although market
price performance generally reflects investment
results over time, during shorter periods,
returns at market price can also be affected by
factors such as changing perceptions about the
Fund, market conditions, fluctuations in supply
and demand for the Funds shares, or changes in
Fund distributions. The Fund has no current
intention to utilize leverage, but may do so in
the future through borrowings and other
permitted methods. Investment return and
principal value will fluctuate so that shares,
when sold, may be worth more or less than their
original cost. Performance is for the stated
time period only; due to market volatility, the
Funds current performance may be lower or
higher than the quoted return. For performance
as of the most recent month end, please refer to
www.eatonvance.com.
Top 10 Holdings1
By total investments
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General Electric Co. |
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2.7 |
% |
Apple, Inc. |
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2.6 |
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JPMorgan Chase & Co. |
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2.4 |
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Microsoft Corp. |
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2.3 |
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Johnson & Johnson |
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2.3 |
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Chevron Corp. |
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2.2 |
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Cisco Systems, Inc. |
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2.2 |
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Bank of America Corp. |
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2.1 |
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International Business Machines Corp. |
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2.0 |
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Goldman Sachs Group, Inc. |
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2.0 |
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1 |
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Top 10 Holdings represented
22.8% of the Funds total investments as of
3/31/10. The Top 10 Holdings are presented
without the offsetting effect of the Funds
written option positions at 3/31/10.
Excludes cash equivalents. |
Sector Weightings2
By total investments
2 |
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Reflects the Funds total investments as of 3/31/10. Sector Weightings are presented without the offsetting effect of the Funds written
option positions at 3/31/10. Excludes cash equivalents. |
3
Eaton Vance
Enhanced Equity Income
Fund as
of March 31, 2010
PORTFOLIO OF
INVESTMENTS (Unaudited)
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Common
Stocks 103.2%(1)
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Security
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Shares
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Value
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Aerospace
& Defense 2.0%
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General Dynamics Corp.
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87,890
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$
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6,785,108
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Lockheed Martin Corp.
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51,489
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4,284,915
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$
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11,070,023
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Air
Freight & Logistics 0.8%
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FedEx Corp.
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49,044
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$
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4,580,710
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$
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4,580,710
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Beverages 2.5%
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Coca-Cola
Co. (The)
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102,852
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$
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5,656,860
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PepsiCo, Inc.
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129,030
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8,536,625
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$
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14,193,485
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Biotechnology 1.4%
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Amgen,
Inc.(2)
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94,121
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$
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5,624,671
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Celgene
Corp.(2)
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37,704
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2,336,140
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$
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7,960,811
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Capital
Markets 3.5%
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Goldman Sachs Group, Inc.
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66,584
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$
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11,361,228
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Northern Trust Corp.
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94,239
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5,207,647
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State Street Corp.
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72,658
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3,279,782
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$
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19,848,657
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Chemicals 0.5%
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Monsanto Co.
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38,443
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$
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2,745,599
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$
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2,745,599
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Commercial
Banks 3.5%
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PNC Financial Services Group, Inc.
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77,948
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$
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4,653,496
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U.S. Bancorp
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147,462
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3,816,316
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Wells Fargo & Co.
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352,605
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10,973,068
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$
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19,442,880
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Commercial
Services & Supplies 1.2%
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Waste Management, Inc.
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196,926
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$
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6,780,162
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$
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6,780,162
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Communications
Equipment 3.0%
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Cisco Systems,
Inc.(2)
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479,090
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$
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12,470,713
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QUALCOMM, Inc.
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98,159
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4,121,696
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$
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16,592,409
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Computers
& Peripherals 6.4%
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Apple,
Inc.(2)
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63,313
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$
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14,874,123
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Hewlett-Packard Co.
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173,570
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9,225,246
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International Business Machines Corp.
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90,748
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11,638,431
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$
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35,737,800
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Consumer
Finance 0.6%
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American Express Co.
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81,560
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$
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3,365,166
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$
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3,365,166
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Diversified
Financial Services 5.0%
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Bank of America Corp.
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684,141
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$
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12,211,917
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Citigroup,
Inc.(2)
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425,334
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1,722,602
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JPMorgan Chase & Co.
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314,081
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14,055,125
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$
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27,989,644
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Diversified
Telecommunication Services 1.4%
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AT&T, Inc.
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179,077
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$
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4,627,350
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Verizon Communications, Inc.
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97,933
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|
3,037,881
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$
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7,665,231
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Electric
Utilities 1.0%
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American Electric Power Co., Inc.
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162,217
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$
|
5,544,577
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$
|
5,544,577
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Electrical
Equipment 1.3%
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Emerson Electric Co.
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145,504
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$
|
7,324,671
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$
|
7,324,671
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Electronic
Equipment, Instruments & Components 1.3%
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Corning, Inc.
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376,802
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$
|
7,615,168
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|
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$
|
7,615,168
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See
notes to financial statements
4
Eaton Vance
Enhanced Equity Income
Fund as
of March 31, 2010
PORTFOLIO OF
INVESTMENTS (Unaudited) CONTD
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Security
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Shares
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Value
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Energy
Equipment & Services 1.4%
|
|
Halliburton Co.
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70,371
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$
|
2,120,278
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Schlumberger, Ltd.
|
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|
87,318
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|
|
5,541,201
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$
|
7,661,479
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Food
& Staples Retailing 2.1%
|
|
CVS Caremark Corp.
|
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|
120,518
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|
$
|
4,406,138
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|
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|
Wal-Mart Stores, Inc.
|
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|
129,867
|
|
|
|
7,220,605
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|
$
|
11,626,743
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|
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Food
Products 1.9%
|
|
Kellogg Co.
|
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|
53,781
|
|
|
$
|
2,873,519
|
|
|
|
Nestle SA ADR
|
|
|
154,966
|
|
|
|
7,934,259
|
|
|
|
|
|
|
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|
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|
|
$
|
10,807,778
|
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|
Health
Care Equipment & Supplies 3.4%
|
|
Baxter International, Inc.
|
|
|
69,166
|
|
|
$
|
4,025,461
|
|
|
|
Boston Scientific
Corp.(2)
|
|
|
318,419
|
|
|
|
2,298,985
|
|
|
|
Covidien PLC
|
|
|
78,455
|
|
|
|
3,944,717
|
|
|
|
HeartWare International,
Inc.(2)
|
|
|
59,868
|
|
|
|
2,662,287
|
|
|
|
Thoratec
Corp.(2)
|
|
|
86,497
|
|
|
|
2,893,325
|
|
|
|
Zimmer Holdings,
Inc.(2)
|
|
|
54,875
|
|
|
|
3,248,600
|
|
|
|
|
|
|
|
|
|
|
|
$
|
19,073,375
|
|
|
|
|
|
|
|
Health
Care Providers & Services 0.9%
|
|
AmerisourceBergen Corp.
|
|
|
108,544
|
|
|
$
|
3,139,092
|
|
|
|
Fresenius Medical Care AG & Co. KGaA ADR
|
|
|
30,548
|
|
|
|
1,715,576
|
|
|
|
|
|
|
|
|
|
|
|
$
|
4,854,668
|
|
|
|
|
|
|
|
Hotels,
Restaurants & Leisure 1.4%
|
|
Carnival Corp.
|
|
|
96,329
|
|
|
$
|
3,745,272
|
|
|
|
McDonalds Corp.
|
|
|
59,071
|
|
|
|
3,941,217
|
|
|
|
|
|
|
|
|
|
|
|
$
|
7,686,489
|
|
|
|
|
|
|
|
Household
Products 3.8%
|
|
Colgate-Palmolive Co.
|
|
|
131,123
|
|
|
$
|
11,179,547
|
|
|
|
Procter & Gamble Co.
|
|
|
164,231
|
|
|
|
10,390,895
|
|
|
|
|
|
|
|
|
|
|
|
$
|
21,570,442
|
|
|
|
|
|
|
|
Industrial
Conglomerates 2.8%
|
|
General Electric Co.
|
|
|
857,959
|
|
|
$
|
15,614,854
|
|
|
|
|
|
|
|
|
|
|
|
$
|
15,614,854
|
|
|
|
|
|
|
Insurance 3.6%
|
|
Berkshire Hathaway, Inc.,
Class B(2)
|
|
|
68,526
|
|
|
$
|
5,569,108
|
|
|
|
Lincoln National Corp.
|
|
|
120,087
|
|
|
|
3,686,671
|
|
|
|
MetLife, Inc.
|
|
|
111,605
|
|
|
|
4,836,961
|
|
|
|
Prudential Financial, Inc.
|
|
|
98,694
|
|
|
|
5,970,987
|
|
|
|
|
|
|
|
|
|
|
|
$
|
20,063,727
|
|
|
|
|
|
|
|
Internet
& Catalog Retail 1.3%
|
|
Amazon.com,
Inc.(2)
|
|
|
54,610
|
|
|
$
|
7,412,215
|
|
|
|
|
|
|
|
|
|
|
|
$
|
7,412,215
|
|
|
|
|
|
|
|
Internet
Software & Services 1.8%
|
|
Google, Inc.,
Class A(2)
|
|
|
17,812
|
|
|
$
|
10,099,582
|
|
|
|
|
|
|
|
|
|
|
|
$
|
10,099,582
|
|
|
|
|
|
|
|
IT
Services 1.2%
|
|
MasterCard, Inc., Class A
|
|
|
25,965
|
|
|
$
|
6,595,110
|
|
|
|
|
|
|
|
|
|
|
|
$
|
6,595,110
|
|
|
|
|
|
|
|
Life
Sciences Tools & Services 0.9%
|
|
Thermo Fisher Scientific,
Inc.(2)
|
|
|
97,676
|
|
|
$
|
5,024,453
|
|
|
|
|
|
|
|
|
|
|
|
$
|
5,024,453
|
|
|
|
|
|
|
|
Machinery 3.6%
|
|
Danaher Corp.
|
|
|
91,520
|
|
|
$
|
7,313,363
|
|
|
|
Deere & Co.
|
|
|
84,560
|
|
|
|
5,027,938
|
|
|
|
Illinois Tool Works, Inc.
|
|
|
102,697
|
|
|
|
4,863,730
|
|
|
|
PACCAR, Inc.
|
|
|
72,756
|
|
|
|
3,153,245
|
|
|
|
|
|
|
|
|
|
|
|
$
|
20,358,276
|
|
|
|
|
|
|
|
Media 0.7%
|
|
Walt Disney Co. (The)
|
|
|
108,475
|
|
|
$
|
3,786,862
|
|
|
|
|
|
|
|
|
|
|
|
$
|
3,786,862
|
|
|
|
|
|
|
|
Metals
& Mining 3.7%
|
|
BHP Billiton, Ltd. ADR
|
|
|
43,446
|
|
|
$
|
3,489,583
|
|
|
|
Freeport-McMoRan Copper & Gold, Inc.
|
|
|
39,775
|
|
|
|
3,322,803
|
|
|
|
Goldcorp, Inc.
|
|
|
274,055
|
|
|
|
10,200,327
|
|
|
|
United States Steel Corp.
|
|
|
56,082
|
|
|
|
3,562,329
|
|
|
|
|
|
|
|
|
|
|
|
$
|
20,575,042
|
|
|
|
|
|
|
See
notes to financial statements
5
Eaton Vance
Enhanced Equity Income
Fund as
of March 31, 2010
PORTFOLIO OF
INVESTMENTS (Unaudited) CONTD
|
|
|
|
|
|
|
|
|
|
|
Security
|
|
Shares
|
|
|
Value
|
|
|
|
|
|
|
Multi-Utilities 1.1%
|
|
PG&E Corp.
|
|
|
83,297
|
|
|
$
|
3,533,459
|
|
|
|
Public Service Enterprise Group, Inc.
|
|
|
91,570
|
|
|
|
2,703,146
|
|
|
|
|
|
|
|
|
|
|
|
$
|
6,236,605
|
|
|
|
|
|
|
|
Multiline
Retail 0.9%
|
|
Target Corp.
|
|
|
98,969
|
|
|
$
|
5,205,769
|
|
|
|
|
|
|
|
|
|
|
|
$
|
5,205,769
|
|
|
|
|
|
|
|
Oil,
Gas & Consumable Fuels 9.6%
|
|
Anadarko Petroleum Corp.
|
|
|
118,517
|
|
|
$
|
8,631,593
|
|
|
|
Apache Corp.
|
|
|
67,534
|
|
|
|
6,854,701
|
|
|
|
Chevron Corp.
|
|
|
168,484
|
|
|
|
12,776,142
|
|
|
|
Exxon Mobil Corp.
|
|
|
106,069
|
|
|
|
7,104,502
|
|
|
|
Hess Corp.
|
|
|
131,106
|
|
|
|
8,200,680
|
|
|
|
Occidental Petroleum Corp.
|
|
|
86,233
|
|
|
|
7,290,138
|
|
|
|
Peabody Energy Corp.
|
|
|
60,372
|
|
|
|
2,759,000
|
|
|
|
|
|
|
|
|
|
|
|
$
|
53,616,756
|
|
|
|
|
|
|
|
Personal
Products 0.4%
|
|
Avon Products, Inc.
|
|
|
61,884
|
|
|
$
|
2,096,011
|
|
|
|
|
|
|
|
|
|
|
|
$
|
2,096,011
|
|
|
|
|
|
|
|
Pharmaceuticals 6.2%
|
|
Abbott Laboratories
|
|
|
98,225
|
|
|
$
|
5,174,493
|
|
|
|
Bristol-Myers Squibb Co.
|
|
|
163,695
|
|
|
|
4,370,656
|
|
|
|
Johnson & Johnson
|
|
|
201,616
|
|
|
|
13,145,363
|
|
|
|
Merck & Co., Inc.
|
|
|
55,170
|
|
|
|
2,060,600
|
|
|
|
Pfizer, Inc.
|
|
|
576,044
|
|
|
|
9,879,155
|
|
|
|
|
|
|
|
|
|
|
|
$
|
34,630,267
|
|
|
|
|
|
|
|
Real
Estate Investment Trusts (REITs) 0.2%
|
|
AvalonBay Communities, Inc.
|
|
|
5,597
|
|
|
$
|
483,301
|
|
|
|
Boston Properties, Inc.
|
|
|
6,279
|
|
|
|
473,688
|
|
|
|
|
|
|
|
|
|
|
|
$
|
956,989
|
|
|
|
|
|
|
|
Road
& Rail 0.8%
|
|
CSX Corp.
|
|
|
86,531
|
|
|
$
|
4,404,428
|
|
|
|
|
|
|
|
|
|
|
|
$
|
4,404,428
|
|
|
|
|
|
|
Semiconductors
& Semiconductor Equipment 2.2%
|
|
ASML Holding NV ADR
|
|
|
201,450
|
|
|
$
|
7,131,330
|
|
|
|
Intel Corp.
|
|
|
222,773
|
|
|
|
4,958,927
|
|
|
|
|
|
|
|
|
|
|
|
$
|
12,090,257
|
|
|
|
|
|
|
|
Software 3.9%
|
|
Microsoft Corp.
|
|
|
449,916
|
|
|
$
|
13,169,041
|
|
|
|
Oracle Corp.
|
|
|
331,155
|
|
|
|
8,507,372
|
|
|
|
|
|
|
|
|
|
|
|
$
|
21,676,413
|
|
|
|
|
|
|
|
Specialty
Retail 5.1%
|
|
Best Buy Co., Inc.
|
|
|
114,814
|
|
|
$
|
4,884,188
|
|
|
|
Gap, Inc. (The)
|
|
|
152,429
|
|
|
|
3,522,634
|
|
|
|
Home Depot, Inc.
|
|
|
268,893
|
|
|
|
8,698,688
|
|
|
|
Staples, Inc.
|
|
|
254,538
|
|
|
|
5,953,644
|
|
|
|
TJX Companies, Inc. (The)
|
|
|
126,283
|
|
|
|
5,369,553
|
|
|
|
|
|
|
|
|
|
|
|
$
|
28,428,707
|
|
|
|
|
|
|
|
Textiles,
Apparel & Luxury Goods 1.2%
|
|
NIKE, Inc., Class B
|
|
|
95,523
|
|
|
$
|
7,020,941
|
|
|
|
|
|
|
|
|
|
|
|
$
|
7,020,941
|
|
|
|
|
|
|
|
Tobacco 1.1%
|
|
Philip Morris International, Inc.
|
|
|
116,936
|
|
|
$
|
6,099,382
|
|
|
|
|
|
|
|
|
|
|
|
$
|
6,099,382
|
|
|
|
|
|
|
|
Wireless
Telecommunication Services 0.6%
|
|
American Tower Corp.,
Class A(2)
|
|
|
76,823
|
|
|
$
|
3,273,428
|
|
|
|
|
|
|
|
|
|
|
|
$
|
3,273,428
|
|
|
|
|
|
|
|
|
Total
Common Stocks
|
|
|
(identified
cost $505,050,664)
|
|
$
|
577,004,041
|
|
|
|
|
|
See
notes to financial statements
6
Eaton Vance
Enhanced Equity Income
Fund as
of March 31, 2010
PORTFOLIO OF
INVESTMENTS (Unaudited) CONTD
|
|
|
|
|
|
|
|
|
|
|
Short-Term
Investments 0.1%
|
|
|
|
Interest
|
|
|
|
|
|
|
Description
|
|
(000s
omitted)
|
|
|
Value
|
|
|
|
|
|
Eaton Vance Cash Reserves Fund, LLC,
0.17%(3)
|
|
$
|
443
|
|
|
$
|
443,315
|
|
|
|
|
|
|
|
|
Total
Short-Term Investments
|
|
|
(identified
cost $443,315)
|
|
$
|
443,315
|
|
|
|
|
|
|
|
|
Total
Investments 103.3%
|
|
|
(identified
cost $505,493,979)
|
|
$
|
577,447,356
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Covered Call
Options Written (3.3)%
|
|
|
|
Number of
|
|
|
Strike
|
|
|
Expiration
|
|
|
|
|
|
|
Security
|
|
Contracts
|
|
|
Price
|
|
|
Date
|
|
|
Value
|
|
|
|
|
|
Abbott Laboratories
|
|
|
540
|
|
|
$
|
55.00
|
|
|
|
5/22/10
|
|
|
$
|
(21,600
|
)
|
|
|
Amazon.com, Inc.
|
|
|
330
|
|
|
|
130.00
|
|
|
|
4/17/10
|
|
|
|
(229,350
|
)
|
|
|
American Electric Power Co., Inc.
|
|
|
975
|
|
|
|
35.00
|
|
|
|
5/22/10
|
|
|
|
(34,125
|
)
|
|
|
American Express Co.
|
|
|
490
|
|
|
|
43.00
|
|
|
|
4/17/10
|
|
|
|
(10,780
|
)
|
|
|
American Tower Corp., Class A
|
|
|
460
|
|
|
|
45.00
|
|
|
|
4/17/10
|
|
|
|
(6,900
|
)
|
|
|
AmerisourceBergen Corp.
|
|
|
600
|
|
|
|
30.00
|
|
|
|
5/22/10
|
|
|
|
(30,000
|
)
|
|
|
Amgen, Inc.
|
|
|
565
|
|
|
|
57.50
|
|
|
|
4/17/10
|
|
|
|
(148,030
|
)
|
|
|
Anadarko Petroleum Corp.
|
|
|
950
|
|
|
|
70.00
|
|
|
|
5/22/10
|
|
|
|
(494,000
|
)
|
|
|
Apache Corp.
|
|
|
405
|
|
|
|
110.00
|
|
|
|
4/17/10
|
|
|
|
(6,075
|
)
|
|
|
Apple, Inc.
|
|
|
125
|
|
|
|
200.00
|
|
|
|
4/17/10
|
|
|
|
(439,875
|
)
|
|
|
Apple, Inc.
|
|
|
385
|
|
|
|
210.00
|
|
|
|
4/17/10
|
|
|
|
(974,050
|
)
|
|
|
ASML Holding NV ADR
|
|
|
1,210
|
|
|
|
35.00
|
|
|
|
4/17/10
|
|
|
|
(169,400
|
)
|
|
|
AT&T, Inc.
|
|
|
976
|
|
|
|
25.00
|
|
|
|
4/17/10
|
|
|
|
(84,912
|
)
|
|
|
Avon Products, Inc.
|
|
|
340
|
|
|
|
31.00
|
|
|
|
4/17/10
|
|
|
|
(96,900
|
)
|
|
|
Bank of America Corp.
|
|
|
5,475
|
|
|
|
17.00
|
|
|
|
5/22/10
|
|
|
|
(700,800
|
)
|
|
|
Baxter International, Inc.
|
|
|
380
|
|
|
|
57.50
|
|
|
|
5/22/10
|
|
|
|
(83,600
|
)
|
|
|
Berkshire Hathaway, Inc., Class B
|
|
|
415
|
|
|
|
82.00
|
|
|
|
6/19/10
|
|
|
|
(101,675
|
)
|
|
|
Best Buy Co., Inc.
|
|
|
635
|
|
|
|
37.00
|
|
|
|
4/17/10
|
|
|
|
(347,980
|
)
|
|
|
BHP Billiton, Ltd. ADR
|
|
|
240
|
|
|
|
80.00
|
|
|
|
5/22/10
|
|
|
|
(88,800
|
)
|
|
|
Boston Scientific Corp.
|
|
|
1,755
|
|
|
|
8.00
|
|
|
|
5/22/10
|
|
|
|
(35,100
|
)
|
|
|
Bristol-Myers Squibb Co.
|
|
|
985
|
|
|
|
26.00
|
|
|
|
6/19/10
|
|
|
|
(147,750
|
)
|
|
|
Carnival Corp.
|
|
|
580
|
|
|
|
35.00
|
|
|
|
4/17/10
|
|
|
|
(226,200
|
)
|
|
|
Celgene Corp.
|
|
|
230
|
|
|
|
57.50
|
|
|
|
4/17/10
|
|
|
|
(105,800
|
)
|
|
|
Chevron Corp.
|
|
|
1,010
|
|
|
|
75.00
|
|
|
|
6/19/10
|
|
|
|
(275,730
|
)
|
|
|
Cisco Systems, Inc.
|
|
|
960
|
|
|
|
24.00
|
|
|
|
4/17/10
|
|
|
|
(192,000
|
)
|
|
|
Cisco Systems, Inc.
|
|
|
2,875
|
|
|
|
25.00
|
|
|
|
4/17/10
|
|
|
|
(333,500
|
)
|
|
|
Coca Cola Co. (The)
|
|
|
620
|
|
|
|
55.00
|
|
|
|
5/22/10
|
|
|
|
(84,320
|
)
|
|
|
Colgate-Palmolive Co.
|
|
|
1,050
|
|
|
|
80.00
|
|
|
|
5/22/10
|
|
|
|
(593,250
|
)
|
|
|
Corning, Inc.
|
|
|
2,075
|
|
|
|
18.00
|
|
|
|
5/22/10
|
|
|
|
(502,150
|
)
|
|
|
Covidien PLC
|
|
|
470
|
|
|
|
50.00
|
|
|
|
4/17/10
|
|
|
|
(47,000
|
)
|
|
|
CSX Corp.
|
|
|
475
|
|
|
|
47.00
|
|
|
|
5/22/10
|
|
|
|
(218,500
|
)
|
|
|
CVS Caremark Corp.
|
|
|
1,060
|
|
|
|
34.00
|
|
|
|
5/22/10
|
|
|
|
(328,600
|
)
|
|
|
Danaher Corp.
|
|
|
625
|
|
|
|
80.00
|
|
|
|
6/19/10
|
|
|
|
(175,000
|
)
|
|
|
Deere & Co.
|
|
|
575
|
|
|
|
60.00
|
|
|
|
6/19/10
|
|
|
|
(182,275
|
)
|
|
|
Emerson Electric Co.
|
|
|
990
|
|
|
|
48.00
|
|
|
|
6/19/10
|
|
|
|
(346,500
|
)
|
|
|
Exxon Mobil Corp.
|
|
|
640
|
|
|
|
70.00
|
|
|
|
4/17/10
|
|
|
|
(7,040
|
)
|
|
|
FedEx Corp.
|
|
|
100
|
|
|
|
80.00
|
|
|
|
4/17/10
|
|
|
|
(135,000
|
)
|
|
|
FedEx Corp.
|
|
|
295
|
|
|
|
85.00
|
|
|
|
4/17/10
|
|
|
|
(250,750
|
)
|
|
|
Freeport-McMoRan Copper & Gold, Inc.
|
|
|
220
|
|
|
|
80.00
|
|
|
|
5/22/10
|
|
|
|
(145,200
|
)
|
|
|
Fresenius Medical Care AG & Co. KGaA ADR
|
|
|
185
|
|
|
|
55.00
|
|
|
|
4/17/10
|
|
|
|
(27,750
|
)
|
|
|
Gap, Inc. (The)
|
|
|
1,040
|
|
|
|
23.00
|
|
|
|
6/19/10
|
|
|
|
(122,720
|
)
|
|
|
General Dynamics Corp.
|
|
|
485
|
|
|
|
70.00
|
|
|
|
5/22/10
|
|
|
|
(368,600
|
)
|
|
|
General Electric Co.
|
|
|
5,835
|
|
|
|
18.00
|
|
|
|
6/19/10
|
|
|
|
(583,500
|
)
|
|
|
Goldman Sachs Group, Inc.
|
|
|
135
|
|
|
|
160.00
|
|
|
|
4/17/10
|
|
|
|
(151,200
|
)
|
|
|
Goldman Sachs Group, Inc.
|
|
|
400
|
|
|
|
170.00
|
|
|
|
4/17/10
|
|
|
|
(152,000
|
)
|
|
|
Google, Inc., Class A
|
|
|
110
|
|
|
|
560.00
|
|
|
|
6/19/10
|
|
|
|
(335,390
|
)
|
|
|
Halliburton Co.
|
|
|
565
|
|
|
|
30.00
|
|
|
|
4/17/10
|
|
|
|
(47,460
|
)
|
|
|
Hess Corp.
|
|
|
725
|
|
|
|
65.00
|
|
|
|
5/22/10
|
|
|
|
(118,900
|
)
|
|
|
Hewlett-Packard Co.
|
|
|
955
|
|
|
|
50.00
|
|
|
|
5/22/10
|
|
|
|
(372,450
|
)
|
|
|
Home Depot, Inc.
|
|
|
1,480
|
|
|
|
30.00
|
|
|
|
5/22/10
|
|
|
|
(378,880
|
)
|
|
|
Illinois Tool Works, Inc.
|
|
|
830
|
|
|
|
47.50
|
|
|
|
4/17/10
|
|
|
|
(62,250
|
)
|
|
|
Intel Corp.
|
|
|
1,785
|
|
|
|
21.00
|
|
|
|
4/17/10
|
|
|
|
(246,330
|
)
|
|
|
International Business Machines Corp.
|
|
|
180
|
|
|
|
125.00
|
|
|
|
4/17/10
|
|
|
|
(66,600
|
)
|
|
|
International Business Machines Corp.
|
|
|
545
|
|
|
|
135.00
|
|
|
|
4/17/10
|
|
|
|
(4,360
|
)
|
|
|
Johnson & Johnson
|
|
|
1,210
|
|
|
|
65.00
|
|
|
|
4/17/10
|
|
|
|
(82,280
|
)
|
|
|
JPMorgan Chase & Co.
|
|
|
2,135
|
|
|
|
44.00
|
|
|
|
6/19/10
|
|
|
|
(580,720
|
)
|
|
|
Kellogg Co.
|
|
|
325
|
|
|
|
55.00
|
|
|
|
6/19/10
|
|
|
|
(27,300
|
)
|
|
|
Lincoln National Corp.
|
|
|
720
|
|
|
|
28.00
|
|
|
|
4/17/10
|
|
|
|
(198,000
|
)
|
|
|
Lockheed Martin Corp.
|
|
|
350
|
|
|
|
85.00
|
|
|
|
6/19/10
|
|
|
|
(85,750
|
)
|
|
|
MasterCard, Inc., Class A
|
|
|
165
|
|
|
|
260.00
|
|
|
|
4/17/10
|
|
|
|
(42,075
|
)
|
|
|
McDonalds Corp.
|
|
|
355
|
|
|
|
65.00
|
|
|
|
4/17/10
|
|
|
|
(68,160
|
)
|
|
|
Merck & Co., Inc.
|
|
|
335
|
|
|
|
40.00
|
|
|
|
4/17/10
|
|
|
|
(1,675
|
)
|
|
|
MetLife, Inc.
|
|
|
760
|
|
|
|
42.00
|
|
|
|
6/19/10
|
|
|
|
(226,100
|
)
|
|
|
Microsoft Corp.
|
|
|
900
|
|
|
|
29.00
|
|
|
|
4/17/10
|
|
|
|
(57,600
|
)
|
|
|
Microsoft Corp.
|
|
|
2,700
|
|
|
|
30.00
|
|
|
|
4/17/10
|
|
|
|
(62,100
|
)
|
|
|
Monsanto Co.
|
|
|
230
|
|
|
|
85.00
|
|
|
|
4/17/10
|
|
|
|
(1,610
|
)
|
|
|
NIKE, Inc., Class B
|
|
|
575
|
|
|
|
65.00
|
|
|
|
4/17/10
|
|
|
|
(494,500
|
)
|
|
|
Northern Trust Corp.
|
|
|
520
|
|
|
|
55.00
|
|
|
|
4/17/10
|
|
|
|
(59,800
|
)
|
|
|
Occidental Petroleum Corp.
|
|
|
475
|
|
|
|
80.00
|
|
|
|
5/22/10
|
|
|
|
(299,250
|
)
|
|
|
Oracle Corp.
|
|
|
2,255
|
|
|
|
25.00
|
|
|
|
6/19/10
|
|
|
|
(326,975
|
)
|
|
|
PACCAR, Inc.
|
|
|
400
|
|
|
|
36.00
|
|
|
|
5/22/10
|
|
|
|
(304,000
|
)
|
|
|
Peabody Energy Corp.
|
|
|
305
|
|
|
|
46.00
|
|
|
|
4/17/10
|
|
|
|
(42,700
|
)
|
|
|
PepsiCo, Inc.
|
|
|
775
|
|
|
|
62.50
|
|
|
|
4/17/10
|
|
|
|
(294,500
|
)
|
|
|
Pfizer, Inc.
|
|
|
3,460
|
|
|
|
18.00
|
|
|
|
6/19/10
|
|
|
|
(103,800
|
)
|
|
|
PG&E Corp.
|
|
|
500
|
|
|
|
45.00
|
|
|
|
6/19/10
|
|
|
|
(17,500
|
)
|
|
|
Philip Morris International, Inc.
|
|
|
794
|
|
|
|
50.00
|
|
|
|
6/19/10
|
|
|
|
(265,990
|
)
|
|
|
PNC Financial Services Group, Inc.
|
|
|
430
|
|
|
|
55.00
|
|
|
|
5/22/10
|
|
|
|
(204,250
|
)
|
|
|
Procter & Gamble Co.
|
|
|
1,315
|
|
|
|
62.50
|
|
|
|
4/17/10
|
|
|
|
(149,910
|
)
|
|
|
Prudential Financial, Inc.
|
|
|
675
|
|
|
|
55.00
|
|
|
|
6/19/10
|
|
|
|
(452,250
|
)
|
|
|
Public Service Enterprise Group, Inc.
|
|
|
550
|
|
|
|
30.00
|
|
|
|
6/19/10
|
|
|
|
(41,250
|
)
|
|
|
QUALCOMM, Inc.
|
|
|
540
|
|
|
|
41.00
|
|
|
|
4/17/10
|
|
|
|
(75,060
|
)
|
|
|
Schlumberger, Ltd.
|
|
|
480
|
|
|
|
65.00
|
|
|
|
5/22/10
|
|
|
|
(94,080
|
)
|
|
|
See
notes to financial statements
7
Eaton Vance
Enhanced Equity Income
Fund as
of March 31, 2010
PORTFOLIO OF
INVESTMENTS (Unaudited) CONTD
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
|
|
|
Strike
|
|
|
Expiration
|
|
|
|
|
|
|
Security
|
|
Contracts
|
|
|
Price
|
|
|
Date
|
|
|
Value
|
|
|
|
|
|
Staples, Inc.
|
|
|
1,530
|
|
|
$
|
24.00
|
|
|
|
6/19/10
|
|
|
$
|
(126,225
|
)
|
|
|
State Street Corp.
|
|
|
400
|
|
|
|
45.00
|
|
|
|
5/22/10
|
|
|
|
(84,000
|
)
|
|
|
Target Corp.
|
|
|
595
|
|
|
|
50.00
|
|
|
|
4/17/10
|
|
|
|
(158,270
|
)
|
|
|
Thermo Fisher Scientific, Inc.
|
|
|
590
|
|
|
|
50.00
|
|
|
|
6/19/10
|
|
|
|
(194,700
|
)
|
|
|
TJX Companies, Inc. (The)
|
|
|
760
|
|
|
|
40.00
|
|
|
|
4/17/10
|
|
|
|
(201,400
|
)
|
|
|
U.S. Bancorp
|
|
|
1,005
|
|
|
|
25.00
|
|
|
|
6/19/10
|
|
|
|
(170,850
|
)
|
|
|
United States Steel Corp.
|
|
|
310
|
|
|
|
55.00
|
|
|
|
4/17/10
|
|
|
|
(274,350
|
)
|
|
|
Verizon Communications, Inc.
|
|
|
540
|
|
|
|
29.00
|
|
|
|
4/17/10
|
|
|
|
(105,300
|
)
|
|
|
Wal-Mart Stores, Inc.
|
|
|
155
|
|
|
|
52.50
|
|
|
|
4/17/10
|
|
|
|
(48,670
|
)
|
|
|
Wal-Mart Stores, Inc.
|
|
|
625
|
|
|
|
55.00
|
|
|
|
6/19/10
|
|
|
|
(113,750
|
)
|
|
|
Walt Disney Co. (The)
|
|
|
870
|
|
|
|
31.00
|
|
|
|
4/17/10
|
|
|
|
(348,000
|
)
|
|
|
Waste Management, Inc.
|
|
|
1,185
|
|
|
|
35.00
|
|
|
|
4/17/10
|
|
|
|
(23,700
|
)
|
|
|
Wells Fargo & Co.
|
|
|
2,115
|
|
|
|
29.00
|
|
|
|
4/17/10
|
|
|
|
(456,840
|
)
|
|
|
Zimmer Holdings, Inc.
|
|
|
330
|
|
|
|
60.00
|
|
|
|
6/19/10
|
|
|
|
(73,425
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Total
Covered Call Options Written
|
|
|
|
|
|
|
(premiums
received $14,808,443)
|
|
$
|
(18,477,572
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Other
Assets, Less Liabilities 0.0%
|
|
$
|
17,903
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Assets 100.0%
|
|
$
|
558,987,687
|
|
|
|
|
|
The percentage shown for each investment category in the
Portfolio of Investments is based on net assets.
ADR - American Depositary Receipt
|
|
|
(1)
|
|
A portion of each applicable common stock for which a written
call option is outstanding at March 31, 2010 has been
segregated as collateral for such written option. |
|
(2)
|
|
Non-income producing security. |
|
(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 March 31, 2010. Net income allocated from the
investment in Eaton Vance Cash Reserves Fund, LLC and Cash
Management Portfolio, another affiliated investment company, for
the six months ended March 31, 2010 was $1,885 and $0,
respectively. |
See
notes to financial statements
8
Eaton Vance
Enhanced Equity Income
Fund as
of March 31, 2010
FINANCIAL
STATEMENTS (Unaudited)
Statement
of Assets and Liabilities
|
|
|
|
|
|
|
As of
March 31, 2010
|
|
|
|
|
|
|
Assets
|
|
Unaffiliated investments, at value
(identified cost, $505,050,664)
|
|
$
|
577,004,041
|
|
|
|
Affiliated investment, at value
(identified cost, $443,315)
|
|
|
443,315
|
|
|
|
Dividends receivable
|
|
|
640,485
|
|
|
|
Interest receivable from affiliated investment
|
|
|
630
|
|
|
|
Receivable for investments sold
|
|
|
47,490
|
|
|
|
Tax reclaims receivable
|
|
|
81,511
|
|
|
|
|
|
Total assets
|
|
$
|
578,217,472
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
Written options outstanding, at value (premiums received,
$14,808,443)
|
|
$
|
18,477,572
|
|
|
|
Payable to affiliates:
|
|
|
|
|
|
|
Investment adviser fee
|
|
|
470,699
|
|
|
|
Accrued expenses
|
|
|
281,514
|
|
|
|
|
|
Total liabilities
|
|
$
|
19,229,785
|
|
|
|
|
|
Net Assets
|
|
$
|
558,987,687
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sources
of Net Assets
|
|
Common shares, $0.01 par value, unlimited number of shares
authorized, 39,846,348 shares issued and outstanding
|
|
$
|
398,463
|
|
|
|
Additional paid-in capital
|
|
|
672,788,526
|
|
|
|
Accumulated net realized loss
|
|
|
(154,136,749
|
)
|
|
|
Accumulated distributions in excess of net investment income
|
|
|
(28,346,921
|
)
|
|
|
Net unrealized appreciation
|
|
|
68,284,368
|
|
|
|
|
|
Net Assets
|
|
$
|
558,987,687
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Asset Value
|
|
($558,987,687
¸
39,846,348 common shares issued
and outstanding)
|
|
$
|
14.03
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Six
Months Ended
|
|
|
|
|
|
March 31,
2010
|
|
|
|
|
|
|
Investment
Income
|
|
Dividends (net of foreign taxes, $14,467)
|
|
$
|
4,834,971
|
|
|
|
Interest income allocated from affiliated investments
|
|
|
6,418
|
|
|
|
Expenses allocated from affiliated investments
|
|
|
(4,533
|
)
|
|
|
|
|
Total investment income
|
|
$
|
4,836,856
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses
|
|
Investment adviser fee
|
|
$
|
2,706,768
|
|
|
|
Trustees fees and expenses
|
|
|
9,349
|
|
|
|
Custodian fee
|
|
|
129,940
|
|
|
|
Transfer and dividend disbursing agent fees
|
|
|
4,470
|
|
|
|
Legal and accounting services
|
|
|
32,652
|
|
|
|
Printing and postage
|
|
|
109,801
|
|
|
|
Miscellaneous
|
|
|
27,479
|
|
|
|
|
|
Total expenses
|
|
$
|
3,020,459
|
|
|
|
|
|
Deduct
|
|
|
|
|
|
|
Reduction of custodian fee
|
|
$
|
9
|
|
|
|
|
|
Total expense reductions
|
|
$
|
9
|
|
|
|
|
|
|
|
|
|
|
|
|
Net expenses
|
|
$
|
3,020,450
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income
|
|
$
|
1,816,406
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Realized
and Unrealized Gain (Loss)
|
|
Net realized gain (loss)
|
|
|
|
|
|
|
Investment transactions
|
|
$
|
(9,102,565
|
)
|
|
|
Investment transactions allocated from affiliated investments
|
|
|
(69,901
|
)
|
|
|
Written options
|
|
|
(5,621,861
|
)
|
|
|
|
|
Net realized loss
|
|
$
|
(14,794,327
|
)
|
|
|
|
|
Change in unrealized appreciation (depreciation)
|
|
|
|
|
|
|
Investments
|
|
$
|
64,468,788
|
|
|
|
Written options
|
|
|
1,852,781
|
|
|
|
Foreign currency
|
|
|
(775
|
)
|
|
|
|
|
Net change in unrealized appreciation (depreciation)
|
|
$
|
66,320,794
|
|
|
|
|
|
|
|
|
|
|
|
|
Net realized and unrealized gain
|
|
$
|
51,526,467
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase in net assets from operations
|
|
$
|
53,342,873
|
|
|
|
|
|
See
notes to financial statements
9
Eaton Vance
Enhanced Equity Income
Fund as
of March 31, 2010
FINANCIAL
STATEMENTS CONTD
Statements
of Changes in Net Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months
Ended
|
|
|
|
|
|
|
Increase
(Decrease)
|
|
March 31,
2010
|
|
|
Year Ended
|
|
|
|
in Net Assets
|
|
(Unaudited)
|
|
|
September 30,
2009
|
|
|
|
|
From operations
|
|
|
|
|
|
|
|
|
|
|
Net investment income
|
|
$
|
1,816,406
|
|
|
$
|
5,837,564
|
|
|
|
Net realized loss from investment transactions, written options
and foreign currency transactions
|
|
|
(14,794,327
|
)
|
|
|
(137,501,752
|
)
|
|
|
Net change in unrealized appreciation (depreciation) from
investments, written options and foreign currency
|
|
|
66,320,794
|
|
|
|
76,205,784
|
|
|
|
|
|
Net increase (decrease) in net assets from operations
|
|
$
|
53,342,873
|
|
|
$
|
(55,458,404
|
)
|
|
|
|
|
Distributions to shareholders
|
|
|
|
|
|
|
|
|
|
|
From net investment income
|
|
$
|
(30,266,208
|
)*
|
|
$
|
(6,995,420
|
)
|
|
|
Tax return of capital
|
|
|
|
|
|
|
(58,284,654
|
)
|
|
|
|
|
Total distributions
|
|
$
|
(30,266,208
|
)
|
|
$
|
(65,280,074
|
)
|
|
|
|
|
Capital share transactions
|
|
|
|
|
|
|
|
|
|
|
Reinvestment of distributions
|
|
$
|
963,199
|
|
|
$
|
1,158,644
|
|
|
|
|
|
Net increase in net assets from capital
share transactions
|
|
$
|
963,199
|
|
|
$
|
1,158,644
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in net assets
|
|
$
|
24,039,864
|
|
|
$
|
(119,579,834
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Assets
|
|
At beginning of period
|
|
$
|
534,947,823
|
|
|
$
|
654,527,657
|
|
|
|
|
|
At end of period
|
|
$
|
558,987,687
|
|
|
$
|
534,947,823
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated
undistributed
(distributions in excess of)
net investment income
included in net assets
|
|
At end of period
|
|
$
|
(28,346,921
|
)
|
|
$
|
102,881
|
|
|
|
|
|
|
|
*
|
A portion of the
distributions may be deemed a tax return of capital at year-end.
See Note 2.
|
See
notes to financial statements
10
Eaton Vance
Enhanced Equity Income
Fund as
of March 31, 2010
FINANCIAL
STATEMENTS CONTD
Financial
Highlights
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months
Ended
|
|
|
Year Ended
September 30,
|
|
|
|
|
|
|
March 31,
2010
|
|
|
|
|
|
Period Ended
|
|
|
|
(Unaudited)
|
|
|
2009
|
|
|
2008
|
|
|
2007
|
|
|
2006
|
|
|
September 30,
2005(1)
|
|
|
|
Net asset value Beginning of period
|
|
$
|
13.450
|
|
|
$
|
16.490
|
|
|
$
|
21.110
|
|
|
$
|
19.900
|
|
|
$
|
19.960
|
|
|
$
|
19.100(2
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
(Loss) From Operations
|
|
Net investment
income(3)
|
|
$
|
0.046
|
|
|
$
|
0.147
|
|
|
$
|
0.152
|
|
|
$
|
0.080
|
|
|
$
|
0.093
|
|
|
$
|
0.051
|
|
Net realized and unrealized gain (loss)
|
|
|
1.294
|
|
|
|
(1.543
|
)
|
|
|
(3.013
|
)
|
|
|
2.774
|
|
|
|
1.491
|
|
|
|
2.061
|
|
|
|
Total income (loss) from operations
|
|
$
|
1.340
|
|
|
$
|
(1.396
|
)
|
|
$
|
(2.861
|
)
|
|
$
|
2.854
|
|
|
$
|
1.584
|
|
|
$
|
2.112
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less
Distributions
|
|
From net investment income
|
|
$
|
(0.760
|
)*
|
|
$
|
(0.176
|
)
|
|
$
|
(0.154
|
)
|
|
$
|
(0.038
|
)
|
|
$
|
(0.093
|
)
|
|
$
|
(0.051
|
)
|
From net realized gain
|
|
|
|
|
|
|
|
|
|
|
(0.891
|
)
|
|
|
(1.606
|
)
|
|
|
(1.551
|
)
|
|
|
(1.182
|
)
|
Tax return of capital
|
|
|
|
|
|
|
(1.468
|
)
|
|
|
(0.714
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total distributions
|
|
$
|
(0.760
|
)
|
|
$
|
(1.644
|
)
|
|
$
|
(1.759
|
)
|
|
$
|
(1.644
|
)
|
|
$
|
(1.644
|
)
|
|
$
|
(1.233
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Offering costs charged to paid-in
capital(3)
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
(0.019
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net asset value End of period
|
|
$
|
14.030
|
|
|
$
|
13.450
|
|
|
$
|
16.490
|
|
|
$
|
21.110
|
|
|
$
|
19.900
|
|
|
$
|
19.960
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Market value End of period
|
|
$
|
14.060
|
|
|
$
|
13.680
|
|
|
$
|
13.310
|
|
|
$
|
19.440
|
|
|
$
|
20.070
|
|
|
$
|
19.890
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Investment Return on Net Asset
Value(4)
|
|
|
10.34
|
%(5)
|
|
|
(6.20
|
)%
|
|
|
(13.54
|
)%
|
|
|
15.04
|
%(6)
|
|
|
8.46
|
%(7)
|
|
|
11.24
|
%(5)(8)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Investment Return on Market
Value(4)
|
|
|
8.68
|
%(5)
|
|
|
18.23
|
%
|
|
|
(24.23
|
)%
|
|
|
5.04
|
%
|
|
|
9.77
|
%
|
|
|
10.85
|
%(5)(8)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratios/Supplemental
Data
|
|
Net assets, end of period (000s omitted)
|
|
$
|
558,988
|
|
|
$
|
534,948
|
|
|
$
|
654,528
|
|
|
$
|
837,584
|
|
|
$
|
786,478
|
|
|
$
|
787,442
|
|
Ratios (as a percentage of average daily net assets):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses(9)
|
|
|
1.12
|
%(10)
|
|
|
1.17
|
%
|
|
|
1.10
|
%
|
|
|
1.08
|
%
|
|
|
1.09
|
%
|
|
|
1.09
|
%(10)
|
Net investment income
|
|
|
0.67
|
%(10)
|
|
|
1.17
|
%
|
|
|
0.79
|
%
|
|
|
0.39
|
%
|
|
|
0.47
|
%
|
|
|
0.28
|
%(10)
|
Portfolio Turnover
|
|
|
16
|
%(5)
|
|
|
65
|
%
|
|
|
117
|
%
|
|
|
195
|
%
|
|
|
84
|
%
|
|
|
84
|
% (5)
|
|
|
|
|
|
(1)
|
|
For the period from the start of business, October 29,
2004, to September 30, 2005. |
|
(2)
|
|
Net asset value at beginning of period reflects the deduction of
the sales load of $0.90 per share paid by the shareholder from
the $20.00 offering price. |
|
(3)
|
|
Computed using average shares outstanding. |
|
(4)
|
|
Returns are historical and are calculated by determining the
percentage change in net asset value or market value with all
distributions reinvested. |
|
(5)
|
|
Not annualized. |
|
(6)
|
|
During the year ended September 30, 2007, the Fund realized
a gain on the closing out of a written options position that did
not meet investment guidelines. The gain was less than $0.01 per
share and had no effect on total return for the year ended
September 30, 2007. |
|
(7)
|
|
During the year ended September 30, 2006, the investment
adviser reimbursed the Fund for a net realized loss incurred
from the closing out of a written options position that did not
meet the Funds investment guidelines. The reimbursement
was less than $0.01 per share and had no net effect on total
return for the year ended September 30, 2006. |
|
(8)
|
|
Total investment return on net asset value is calculated
assuming a purchase at the offering price of $20.00 less the
sales load of $0.90 per share paid by the shareholder on the
first day and a sale at the net asset value on the last day of
the period reported with all distributions reinvested. Total
investment return on market value is calculated assuming a
purchase at the offering price of $20.00 less the sales load of
$0.90 per share paid by the shareholder on the first day and a
sale at the current market price on the last day of the period
reported with all distributions reinvested. |
|
(9)
|
|
Excludes the effect of custody fee credits, if any, of less than
0.005%. |
|
(10)
|
|
Annualized. |
|
|
* |
A portion of the distributions may be deemed a tax return of
capital at year-end. See Note 2.
|
See
notes to financial statements
11
Eaton Vance
Enhanced Equity Income
Fund as
of March 31, 2010
NOTES TO FINANCIAL
STATEMENTS (Unaudited)
1 Significant
Accounting Policies
Eaton Vance Enhanced Equity Income Fund (the Fund) is a
Massachusetts business trust registered under the Investment
Company Act of 1940, as amended (the 1940 Act), as a
diversified, closed-end management investment company. The
Funds primary investment objective is to provide current
income, with a secondary objective of capital appreciation. The
Fund pursues its investment objectives by investing primarily in
a portfolio of mid-and large-capitalization common stocks,
seeking to invest primarily in companies with above-average
growth and financial strength. Under normal market conditions,
the Fund seeks to generate current earnings in part by employing
an options strategy of writing covered call options with respect
to a substantial portion of its portfolio securities.
The following is a summary of significant accounting policies of
the Fund. The policies are in conformity with accounting
principles generally accepted in the United States of America.
A Investment
Valuation Equity securities (including common
shares of closed-end investment companies) listed on a U.S.
securities exchange generally are valued at the last sale price
on the day of valuation or, if no sales took place on such date,
at the mean between the closing bid and asked prices therefore
on the exchange where such securities are principally traded.
Equity securities listed on the NASDAQ Global or Global Select
Market generally are valued at the NASDAQ official closing
price. Unlisted or listed securities for which closing sales
prices or closing quotations are not available are valued at the
mean between the latest available bid and asked prices or, in
the case of preferred equity securities that are not listed or
traded in the over-the-counter market, by a third party pricing
service that will use 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. Exchange-traded options
are valued at the last sale price for the day of valuation as
quoted on any exchange on which the option is listed or, in the
absence of sales on such date, at the mean between the closing
bid and asked prices therefore as reported by the Options Price
Reporting Authority. Short-term debt securities with a remaining
maturity of sixty days or less are generally valued at amortized
cost, which approximates market value. 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 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. 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 securitys value, or 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 all 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 securitys
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 companys or entitys financial
condition, and an evaluation of the forces that influence the
issuer and the market(s) in which the security is purchased and
sold.
The Fund may invest in Eaton Vance Cash Reserves Fund, LLC (Cash
Reserves Fund), an affiliated investment company managed by
Eaton Vance Management (EVM). Cash Reserves Fund generally
values its investment securities utilizing the amortized cost
valuation technique in accordance with
Rule 2a-7
under the 1940 Act. This technique involves initially valuing a
portfolio security at its cost and thereafter assuming a
constant amortization to maturity of any discount or premium. If
amortized cost is determined not to approximate fair value, Cash
Reserves Fund may value its investment securities based on
available market quotations provided by a third party pricing
service.
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 Funds understanding
12
Eaton Vance
Enhanced Equity Income
Fund as
of March 31, 2010
NOTES TO FINANCIAL
STATEMENTS (Unaudited) CONTD
of the applicable countries tax rules and rates. Interest
income is recorded on the basis of interest accrued, adjusted
for amortization of premium or accretion of discount.
D Federal
Taxes The Funds 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.
At September 30, 2009, the Fund, for federal income tax
purposes, had a capital loss carryforward of $9,096,930 which
will reduce its taxable income arising from future net realized
gains on investment transactions, if any, to the extent
permitted by the Internal Revenue Code, and thus will reduce the
amount of distributions to shareholders, which would otherwise
be necessary to relieve the Fund of any liability for federal
income or excise tax. Such capital loss carryforward will expire
on September 30, 2017.
Additionally, at September 30, 2009, the Fund had a net
capital loss of $128,334,614 attributable to security
transactions incurred after October 31, 2008. This net
capital loss is treated as arising on the first day of the
Funds taxable year ending September 30, 2010.
As of March 31, 2010, the Fund had no uncertain tax
positions that would require financial statement recognition,
de-recognition, or disclosure. Each of the Funds federal
tax returns filed in the
3-year
period ended September 30, 2009 remains subject to
examination by the Internal Revenue Service.
E Expense
Reduction State Street Bank and
Trust Company (SSBT) serves as custodian of the Fund.
Pursuant to the custodian agreement, SSBT receives a fee reduced
by credits, which are determined based on the average daily cash
balance the Fund maintains with SSBT. All credit balances, if
any, used to reduce the Funds custodian fees are reported
as a reduction of expenses in the Statement of Operations.
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 accounting principles generally
accepted in the United States of America requires management to
make estimates and assumptions that affect the reported amounts
of assets and liabilities at the date of the financial
statements and the reported amounts of income and expense during
the reporting period. Actual results could differ from those
estimates.
H Indemnifications
Under the Funds 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 Fund) could be deemed to have personal
liability for the obligations of the Fund. However, the
Funds Declaration of Trust contains an express disclaimer
of liability on the part of Fund shareholders and the By-laws
provide that the Fund shall assume 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 Funds 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 Written
Options Upon the writing of a call or a put
option, the premium received by the Fund is included in the
Statement of Assets and Liabilities as a liability. The amount
of the liability is subsequently
marked-to-market
to reflect the current market value of the option written, in
accordance with the Funds policies on investment
valuations discussed above. Premiums received from writing
options which expire are treated as realized gains. Premiums
received from writing options which are exercised or are closed
are added to or offset against the proceeds or amount paid on
the transaction to determine the realized gain or loss. If a put
option on a security is exercised, the premium reduces the cost
basis of the securities purchased by the Fund. The Fund, as a
writer of an option, may have no control over whether the
underlying securities or other assets may be sold (call) or
purchased (put) and, as a result, bears the market risk of an
unfavorable change in the price of the securities or other
assets underlying the written option. The Fund may also bear the
risk of not being able to enter into a closing transaction if a
liquid secondary market does not exist.
13
Eaton Vance
Enhanced Equity Income
Fund as
of March 31, 2010
NOTES TO FINANCIAL
STATEMENTS (Unaudited) CONTD
J Interim
Financial Statements The interim financial
statements relating to March 31, 2010 and for the six
months then ended have not been audited by an independent
registered public accounting firm, but in the opinion of the
Funds management, reflect all adjustments, consisting only
of normal recurring adjustments, necessary for the fair
presentation of the financial statements.
2 Distributions
to Shareholders
Subject to its Managed Distribution Plan, the Fund intends to
make monthly distributions from its cash available for
distribution, which consists of the Funds dividends and
interest income after payment of Fund expenses, net option
premiums and net realized and unrealized gains on stock
investments. The Fund intends to distribute all or substantially
all of its net realized capital gains (reduced by available
capital loss carryforwards from prior years, if any).
Distributions are recorded on the ex-dividend date. The Fund
distinguishes between distributions on a tax basis and a
financial reporting basis. Accounting principles generally
accepted in the United States of America require that only
distributions in excess of tax basis earnings and profits be
reported in the financial statements as a return of capital.
Permanent differences between book and tax accounting relating
to distributions are reclassified to paid-in capital. For tax
purposes, distributions from short-term capital gains are
considered to be from ordinary income. Distributions in any year
may include a substantial return of capital component. For the
six months ended March 31, 2010, the amount of
distributions estimated to be a tax return of capital was
approximately $28,630,000. The final determination of tax
characteristics of the Funds distributions will occur at
the end of the year, at which time it will be reported to the
shareholders.
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 1.00% of the
Funds average daily gross assets and is payable monthly.
Gross assets as referred to herein represent net assets plus
obligations attributable to investment leverage, if any. Prior
to its liquidation in February 2010, the portion of the
adviser fee payable by Cash Management Portfolio, another
affiliated investment company, on the Funds investment of
cash therein was credited against the Funds investment
adviser fee. EVM does not currently receive a fee for advisory
services provided to Cash Reserves Fund. For the six months
ended March 31, 2010, the Funds investment adviser
fee totaled $2,710,482 of which $3,714 was allocated from Cash
Management Portfolio and $2,706,768 was paid or accrued directly
by the Fund. Prior to October 20, 2009, EVM delegated the
investment management of the Funds options strategy to
Rampart Investment Management Company, Inc. (Rampart) pursuant
to a
sub-advisory
agreement. EVM paid Rampart a portion of its advisory fee for
sub-advisory
services provided to the Fund. EVM terminated its
sub-advisory
agreement with Rampart with respect to the Fund and, effective
October 20, 2009, EVM assumed the investment management of
the Funds options strategy. EVM also serves as
administrator of the Fund, but receives no compensation.
Except for Trustees of the Fund who are not members of
EVMs organization, officers and Trustees receive
remuneration for their services to the Fund out of the
investment adviser fee. Trustees of the Fund who are not
affiliated with EVM 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 March 31, 2010, no significant amounts have been
deferred. Certain officers and Trustees of the Fund are officers
of EVM.
4 Purchases
and Sales of Investments
Purchases and sales of investments, other than short-term
obligations, aggregated $89,966,659 and $122,827,948,
respectively, for the six months ended March 31, 2010.
5 Common
Shares of Beneficial Interest
Common shares issued pursuant to the Funds dividend
reinvestment plan for the six months ended March 31, 2010 and
the year ended September 30, 2009 were 71,355 and 89,833,
respectively.
6 Federal
Income Tax Basis of Investments
The cost and unrealized appreciation (depreciation) of
investments of the Fund at March 31, 2010, as determined on
a federal income tax basis, were as follows:
|
|
|
|
|
|
|
Aggregate cost
|
|
$
|
507,301,976
|
|
|
|
|
|
Gross unrealized appreciation
|
|
$
|
90,836,504
|
|
|
|
Gross unrealized depreciation
|
|
|
(20,691,124
|
)
|
|
|
|
|
Net unrealized appreciation
|
|
$
|
70,145,380
|
|
|
|
|
|
7 Financial Instruments
The Fund may trade in financial instruments with off-balance
sheet risk in the normal course of its investing activities.
These financial instruments may include written options and may
involve, to a varying degree, elements of risk in excess of the
amounts recognized for financial statement purposes. The
notional or contractual amounts of these instruments represent
the investment the Fund has in particular classes of financial
instruments and do not necessarily represent the amounts
potentially subject
14
Eaton Vance
Enhanced Equity Income
Fund as
of March 31, 2010
NOTES TO FINANCIAL
STATEMENTS (Unaudited) CONTD
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 written call options
at March 31, 2010 is included in the Portfolio of
Investments.
Written call options activity for the six months ended
March 31, 2010 was as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
|
|
|
Premiums
|
|
|
|
|
|
Contracts
|
|
|
Received
|
|
|
|
|
Outstanding, beginning of period
|
|
|
82,872
|
|
|
$
|
16,233,693
|
|
|
|
Options written
|
|
|
179,978
|
|
|
|
34,427,403
|
|
|
|
Options terminated in closing purchase transactions
|
|
|
(114,158
|
)
|
|
|
(24,174,887
|
)
|
|
|
Options exercised
|
|
|
(6,728
|
)
|
|
|
(1,208,422
|
)
|
|
|
Options expired
|
|
|
(58,379
|
)
|
|
|
(10,469,344
|
)
|
|
|
|
|
Outstanding, end of period
|
|
|
83,585
|
|
|
$
|
14,808,443
|
|
|
|
|
|
At March 31, 2010, the Fund had sufficient cash
and/or
securities to cover commitments under these contracts.
The Fund is subject to equity price risk in the normal course of
pursuing its investment objective. The Fund generally intends to
write covered call options on individual stocks above the
current value of the stock to generate premium income. In
writing call options on individual stocks, the Fund in effect,
sells potential appreciation in the value of the applicable
stock above the exercise price in exchange for the option
premium received. The Fund retains the risk of loss, minus the
premium received, should the price of the underlying stock
decline. The Fund is not subject to counterparty credit risk
with respect to its written options as the Fund, not the
counterparty, is obligated to perform under such derivatives.
The fair value of derivative instruments (not considered to be
hedging instruments for accounting disclosure purposes) and
whose primary underlying risk exposure is equity price risk at
March 31, 2010 was as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair
Value
|
|
|
|
Derivative
|
|
Asset
Derivatives
|
|
|
Liability
Derivatives(1)
|
|
|
|
|
Written options
|
|
$
|
|
|
|
$
|
18,477,572
|
|
|
|
|
|
|
(1)
|
|
Statement of Assets and Liabilities location: Written options
outstanding, at value. |
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
March 31, 2010 was as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in
|
|
|
|
|
|
|
|
|
Unrealized
|
|
|
|
|
|
Realized Gain
|
|
|
Appreciation
|
|
|
|
|
|
(Loss) on
|
|
|
(Depreciation)
on
|
|
|
|
|
|
Derivatives
|
|
|
Derivatives
|
|
|
|
|
|
Recognized in
|
|
|
Recognized in
|
|
|
|
Derivative
|
|
Income(1)
|
|
|
Income(2)
|
|
|
|
|
Written options
|
|
$
|
(5,621,861
|
)
|
|
$
|
1,852,781
|
|
|
|
|
|
|
(1)
|
|
Statement of Operations location: Net realized gain
(loss) Written options. |
|
(2)
|
|
Statement of Operations location: Change in unrealized
appreciation (depreciation) Written options. |
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 funds own assumptions in determining the fair
value of investments)
|
The inputs or methodology used for valuing securities are not
necessarily an indication of the risk associated with investing
in those securities.
At March 31, 2010, the inputs used in valuing the
Funds investments, which are carried at value, were as
follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quoted
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Prices in
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Active
|
|
|
Significant
|
|
|
|
|
|
|
|
|
|
|
|
Markets for
|
|
|
Other
|
|
|
Significant
|
|
|
|
|
|
|
|
|
Identical
|
|
|
Observable
|
|
|
Unobservable
|
|
|
|
|
|
|
|
|
Assets
|
|
|
Inputs
|
|
|
Inputs
|
|
|
|
|
|
|
|
|
|
Asset
Description
|
|
(Level
1)
|
|
|
(Level
2)
|
|
|
(Level
3)
|
|
|
Total
|
|
|
|
|
Common Stocks
|
|
$
|
577,004,041
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
577,004,041
|
|
|
|
Short-Term Investments
|
|
|
|
|
|
|
443,315
|
|
|
|
|
|
|
|
443,315
|
|
|
|
|
|
Total Investments
|
|
$
|
577,004,041
|
|
|
$
|
443,315
|
|
|
$
|
|
|
|
$
|
577,447,356
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liability Description
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Covered Call Options Written
|
|
$
|
(18,477,572
|
)
|
|
$
|
|
|
|
$
|
|
|
|
$
|
(18,477,572
|
)
|
|
|
|
|
Total
|
|
$
|
(18,477,572
|
)
|
|
$
|
|
|
|
$
|
|
|
|
$
|
(18,477,572
|
)
|
|
|
|
|
15
Eaton Vance
Enhanced Equity Income
Fund as
of March 31, 2010
NOTES TO FINANCIAL
STATEMENTS (Unaudited) CONTD
The level classification by major category of investments is the
same as the category presentation in the Portfolio of
Investments.
The Fund held no investments or other financial instruments as
of September 30, 2009 whose fair value was determined using
Level 3 inputs.
16
Eaton Vance
Enhanced Equity Income
Fund as
of March 31, 2010
NOTICE TO
SHAREHOLDERS (Unaudited)
In November 2009, the Board approved a change to the
Funds investment policies with respect to the sale of
stock underlying a call option. As part of its investment
program, the Fund sells call options on a substantial portion of
the stocks it holds and is required to buy back a call option
before selling the stock underlying that option. The investment
policy change approved by the Board allows a Fund to sell the
stock underlying a call option prior to purchasing back the call
option on up to 5% of the Funds net assets, provided that
such sales occur no more than three days before the option buy
back. Previously, call options were covered continuously.
17
Eaton Vance
Enhanced Equity Income
Fund
BOARD OF TRUSTEES ANNUAL
APPROVAL OF THE INVESTMENT ADVISORY AGREEMENT
Overview
of the Contract Review Process
The Investment Company Act of 1940, as amended (the 1940
Act), provides, in substance, that each investment
advisory agreement between a fund and its investment adviser
will continue in effect from year to year only if its
continuance is approved at least annually by the funds
board of trustees, including by a vote of a majority of the
trustees who are not interested persons of the fund
(Independent Trustees), cast in person at a meeting
called for the purpose of considering such approval.
At a meeting of the Boards of Trustees (each a
Board) of the Eaton Vance group of mutual funds (the
Eaton Vance Funds) held on April 27, 2009, the
Board, including a majority of the Independent Trustees, voted
to approve continuation of existing advisory and
sub-advisory
agreements for the Eaton Vance Funds for an additional
one-year
period. In voting its approval, the Board relied upon the
affirmative recommendation of the Contract Review Committee of
the Board (formerly the Special Committee), which is a committee
comprised exclusively of Independent Trustees. Prior to making
its recommendation, the Contract Review Committee reviewed
information furnished for a series of meetings of the Contract
Review Committee held in February, March and April 2009.
Such information included, among other things, the following:
Information
about Fees, Performance and Expenses
|
|
|
|
|
An independent report comparing the advisory and related fees
paid by each fund with fees paid by comparable funds;
|
|
|
An independent report comparing each funds total expense
ratio and its components to comparable funds;
|
|
|
An independent report comparing the investment performance of
each fund to the investment performance of comparable funds over
various time periods;
|
|
|
Data regarding investment performance in comparison to relevant
peer groups of funds and appropriate indices;
|
|
|
Comparative information concerning fees charged by each adviser
for managing other mutual funds and institutional accounts using
investment strategies and techniques similar to those used in
managing the fund;
|
|
|
Profitability analyses for each adviser with respect to each
fund;
|
Information
about Portfolio Management
|
|
|
|
|
Descriptions of the investment management services provided to
each fund, including the investment strategies and processes
employed, and any changes in portfolio management processes and
personnel;
|
|
|
Information concerning the allocation of brokerage and the
benefits received by each adviser as a result of brokerage
allocation, including information concerning the acquisition of
research through soft dollar benefits received in
connection with the funds brokerage, and the
implementation of a soft dollar reimbursement program
established with respect to the funds;
|
|
|
Data relating to portfolio turnover rates of each fund;
|
|
|
The procedures and processes used to determine the fair value of
fund assets and actions taken to monitor and test the
effectiveness of such procedures and processes;
|
Information
about each Adviser
|
|
|
|
|
Reports detailing the financial results and condition of each
adviser;
|
|
|
Descriptions of the qualifications, education and experience of
the individual investment professionals whose responsibilities
include portfolio management and investment research for the
funds, and information relating to their compensation and
responsibilities with respect to managing other mutual funds and
investment accounts;
|
|
|
Copies of the Codes of Ethics of each adviser and its
affiliates, together with information relating to compliance
with and the administration of such codes;
|
|
|
Copies of or descriptions of each advisers proxy voting
policies and procedures;
|
|
|
Information concerning the resources devoted to compliance
efforts undertaken by each adviser and its affiliates on behalf
of the funds (including descriptions of various compliance
programs) and their record of compliance with investment
policies and restrictions, including policies with respect to
market-timing, late trading and selective portfolio disclosure,
and with policies on personal securities transactions;
|
|
|
Descriptions of the business continuity and disaster recovery
plans of each adviser and its affiliates;
|
Other
Relevant Information
|
|
|
|
|
Information concerning the nature, cost and character of the
administrative and other non-investment management services
provided by Eaton Vance Management and its affiliates;
|
|
|
Information concerning management of the relationship with the
custodian, subcustodians and fund accountants by each adviser or
the funds administrator; and
|
|
|
The terms of each advisory agreement.
|
18
Eaton Vance
Enhanced Equity Income
Fund
BOARD OF TRUSTEES ANNUAL
APPROVAL OF THE INVESTMENT ADVISORY
AGREEMENT CONTD
In addition to the information identified above, the Contract
Review Committee considered information provided from time to
time by each adviser throughout the year at meetings of the
Board and its committees. Over the course of the twelve-month
period ended April 30, 2009, the Board met eighteen times
and the Contract Review Committee, the Audit Committee, the
Governance Committee, the Portfolio Management Committee and the
Compliance Reports and Regulatory Matters Committee, each of
which is a Committee comprised solely of Independent Trustees,
met seven, five, six, six and six times, respectively. At such
meetings, the Trustees received, among other things,
presentations by the portfolio managers and other investment
professionals of each adviser relating to the investment
performance of each fund and the investment strategies used in
pursuing the funds investment objective.
For funds that invest through one or more underlying portfolios,
the Board considered similar information about the portfolio(s)
when considering the approval of advisory agreements. In
addition, in cases where the funds investment adviser has
engaged a
sub-adviser,
the Board considered similar information about the
sub-adviser
when considering the approval of any
sub-advisory
agreement.
The Contract Review Committee was assisted throughout the
contract review process by Goodwin Procter LLP, legal counsel
for the Independent Trustees. The members of the Contract Review
Committee relied upon the advice of such counsel and their own
business judgment in determining the material factors to be
considered in evaluating each advisory and
sub-advisory
agreement and the weight to be given to each such factor. The
conclusions reached with respect to each advisory and
sub-advisory
agreement were based on a comprehensive evaluation of all the
information provided and not any single factor. Moreover, each
member of the Contract Review Committee may have placed varying
emphasis on particular factors in reaching conclusions with
respect to each advisory and
sub-advisory
agreement.
Results
of the Process
Based on its consideration of the foregoing, and such other
information as it deemed relevant, including the factors and
conclusions described below, the Contract Review Committee
concluded that the continuance of the investment advisory
agreement between Eaton Vance Enhanced Equity Income Fund (the
Fund), and Eaton Vance Management (the
Adviser) and the
sub-advisory
agreement with Rampart Investment Management Company, Inc. (the
Sub-adviser),
including their fee structures, is in the interests of
shareholders and, therefore, the Contract Review Committee
recommended to the Board approval of each agreement. The Board
accepted the recommendation of the Contract Review Committee as
well as the factors considered and conclusions reached by the
Contract Review Committee with respect to each agreement.
Accordingly, the Board, including a majority of the Independent
Trustees, voted to approve continuation of the advisory and
sub-advisory
agreements for the Fund.
Nature,
Extent and Quality of Services
In considering whether to approve the investment advisory and
sub-advisory
agreements of the Fund, the Board evaluated the nature, extent
and quality of services provided to the Fund by the Adviser and
the
Sub-adviser.
The Board considered the Advisers and the
Sub-advisers
management capabilities and investment process with respect to
the types of investments held by the Fund, including the
education, experience and number of its investment professionals
and other personnel who provide portfolio management, investment
research, and similar services to the Fund, including recent
changes to such personnel. In particular, the Board evaluated,
where relevant, the abilities and experience of such investment
personnel in analyzing factors such as credit risk, tax
efficiency, and special considerations relevant to investing in
particular foreign markets or industries. The Board considered
the Advisers in-house research capabilities as well as
other resources available to personnel of the Adviser. The Board
also took into account the resources dedicated to portfolio
management and other services, including the compensation paid
to recruit and retain investment personnel, and the time and
attention devoted to the Fund by senior management. With respect
to the
Sub-adviser,
the Board considered the
Sub-advisers
business reputation and its options strategy and its past
experience in implementing this strategy. The Board also took
into consideration the resources dedicated to portfolio
management and other services, including the compensation paid
to recruit and retain investment personnel, and the time and
attention devoted to the Fund by senior management.
The Board also reviewed the compliance programs of the Adviser
and
Sub-adviser
and relevant affiliates thereof. Among other matters, the Board
considered compliance and reporting matters relating to personal
trading by investment personnel, selective disclosure of
portfolio holdings, late trading, frequent trading, portfolio
valuation, business continuity and the allocation of investment
opportunities. The Board also evaluated the responses of the
Adviser,
Sub-adviser
and their respective affiliates to requests from regulatory
authorities such as the Securities and Exchange Commission and
the Financial Industry Regulatory Authority.
The Board considered shareholder and other administrative
services provided or managed by Eaton Vance Management and its
affiliates, including transfer agency and accounting services.
The Board evaluated the benefits to shareholders of investing in
a fund that is a part of a large family of funds.
19
Eaton Vance
Enhanced Equity Income
Fund
BOARD OF TRUSTEES ANNUAL
APPROVAL OF THE INVESTMENT ADVISORY
AGREEMENT CONTD
The Board considered the Advisers recommendations for
Board action and other steps taken in response to the
unprecedented dislocations experienced in the capital markets
over recent periods, including sustained periods of high
volatility, credit disruption and government intervention. In
particular, the Board considered the Advisers efforts and
expertise with respect to each of the following matters as they
relate to the Fund
and/or other
funds within the Eaton Vance family of funds:
(i) negotiating and maintaining the availability of bank
loan facilities and other sources of credit used for investment
purposes or to satisfy liquidity needs; (ii) establishing
the fair value of securities and other instruments held in
investment portfolios during periods of market volatility and
issuer-specific disruptions; and (iii) the ongoing
monitoring of investment management processes and risk controls.
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 and
sub-advisory
agreements.
Fund Performance
The Board compared the Funds investment performance to a
relevant universe of similarly managed funds identified by an
independent data provider and appropriate benchmark indices. The
Board reviewed comparative performance data for the
one- and
three-year
periods ended September 30, 2008 for the Fund. The Board
concluded that the performance of the Fund was satisfactory.
Management
Fees and Expenses
The Board reviewed contractual investment advisory fee rates,
including any administrative fee rates, payable by the Fund
(referred to as management fees). As part of its
review, the Board considered the Funds management fees and
total expense ratio for the year ended September 30, 2008,
as compared to a group of similarly managed funds selected by an
independent data provider.
After reviewing the foregoing information, and in light of the
nature, extent and quality of the services provided by the
Adviser, the Board concluded that the management fees charged to
the Fund for advisory and related services and the total expense
ratio of the Fund are reasonable.
Profitability
The Board reviewed the level of profits realized by the Adviser
and relevant affiliates thereof 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 with and without regard to revenue sharing or other
payments by the Adviser and its affiliates to third parties in
respect of distribution services. The Board also considered
other direct or indirect benefits received by the Adviser and
its affiliates in connection with its relationship with the
Fund, including the benefits of research services that may be
available to the Adviser or the
Sub-adviser
as a result of securities transactions effected for the Fund and
other investment advisory clients. The Board also concluded
that, in light of its role as a
sub-adviser
not affiliated with the Adviser, the
Sub-advisers
profitability in managing the Fund was not a material factor.
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
reasonable.
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 the economies
of scale with respect to the management of any specific fund or
group of funds. The Board also considered the fact that the Fund
is not continuously offered and concluded that, in light of the
level of the Advisers profits with respect to the Fund,
the implementation of breakpoints in the advisory fee schedule
is not appropriate at this time. Based upon the foregoing, the
Board concluded that the benefits from economies of scale are
currently being shared equitably by the Adviser and its
affiliates and the Fund.
20
Eaton Vance
Enhanced Equity Income
Fund
OFFICERS AND TRUSTEES
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Officers Duncan W. Richardson President
Michael A. Allison Vice President
Thomas E. Faust Jr. Trustee and Vice President
Walter A. Row, III Vice President
Barbara E. Campbell Treasurer
Maureen A. Gemma Secretary and Chief Legal Officer
Paul M. ONeil Chief Compliance Officer
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Trustees Ralph F. Verni Chairman
Benjamin C. Esty
Allen R. Freedman
William H. Park
Ronald A. Pearlman
Helen Frame Peters
Heidi L. Steiger
Lynn A. Stout
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Number of
Employees
The Fund is organized as a Massachusetts business trust and is
registered under the Investment Company Act of 1940, as amended,
as a diversified, closed-end management investment company and
has no employees.
Number of Shareholders
As of March 31, 2010, our records indicate that there are
98 registered shareholders and approximately
35,969 shareholders owning the Fund shares in street name,
such as through brokers, banks, and financial intermediaries.
If you are a street name shareholder and wish to receive our
reports directly, which contain important information about the
Fund, please write or call:
Eaton Vance Distributors, Inc.
Two International Place
Boston, MA 02110
1-800-262-1122
New York
Stock Exchange symbol
The New York Stock Exchange symbol is EOI.
21
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IMPORTANT
NOTICE ABOUT PRIVACY
The Eaton Vance organization is committed to ensuring your
financial privacy. Each of the financial institutions identified
below has in effect the following policy (Privacy
Policy) with respect to nonpublic personal information
about its customers:
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Only such information received from you, through application
forms or otherwise, and information about your Eaton Vance fund
transactions will be collected. This may include information
such as name, address, social security number, tax status,
account balances and transactions.
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None of such information about you (or former customers) will be
disclosed to anyone, except as permitted by law (which includes
disclosure to employees necessary to service your account). In
the normal course of servicing a customers account, Eaton
Vance may share information with unaffiliated third parties that
perform various required services such as transfer agents,
custodians and broker/dealers.
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Policies and procedures (including physical, electronic and
procedural safeguards) are in place that are designed to protect
the confidentiality of such information.
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We reserve the right to change our Privacy Policy at any time
upon proper notification to you. Customers may want to review
our Privacy Policy periodically for changes by accessing the
link on our homepage: www.eatonvance.com.
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Our pledge of privacy applies to the following entities within
the Eaton Vance organization: the Eaton Vance Family of Funds,
Eaton Vance Management, Eaton Vance Investment Counsel, Boston
Management and Research, and Eaton Vance Distributors, Inc.
In addition, our Privacy Policy applies only to those Eaton
Vance customers who are individuals and who have a direct
relationship with us. If a customers account (i.e., fund
shares) is held in the name of a third-party financial
adviser/broker-dealer, it is likely that only such
advisers privacy policies apply to the customer. This
notice supersedes all previously issued privacy disclosures.
For more information about Eaton Vances Privacy Policy,
please call
1-800-262-1122.
Investment
Adviser and Administrator of
Eaton Vance
Enhanced Equity Income Fund
Eaton Vance
Management
Two International
Place
Boston, MA 02110
Custodian
State Street
Bank and Trust Company
200 Clarendon
Street
Boston, MA 02116
Transfer
Agent
American Stock
Transfer & Trust Company
59 Maiden Lane
Plaza Level
New York, NY 10038
Eaton Vance
Enhanced Equity Income Fund
Two International Place
Boston, MA 02110
Item 2. Code of Ethics
The registrant has adopted a code of ethics applicable to its Principal Executive Officer,
Principal Financial Officer and Principal Accounting Officer. The registrant undertakes to provide
a copy of such code of ethics to any person upon request, without charge, by calling
1-800-262-1122.
Item 3. Audit Committee Financial Expert
The registrants Board has designated William H. Park, an independent trustee, as its audit
committee financial expert. Mr. Park is a certified public accountant who is the Vice Chairman of
Commercial Industrial Finance Corp (specialty finance company). Previously, he served as President
and Chief Executive Officer of Prizm Capital Management, LLC (investment management firm), as
Executive Vice President and Chief Financial Officer of United Asset Management Corporation (an
institutional investment management firm) and as a Senior Manager at Price Waterhouse (now
PricewaterhouseCoopers) (an independent registered public accounting firm).
Item 4. Principal Accountant Fees and Services
Not required in this filing.
Item 5. Audit Committee of Listed registrants
Not required in this filing.
Item 6. Schedule of Investments
Please see schedule of investments contained in the Report to Stockholders included under Item 1 of
this Form N-CSR.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment
Companies
The Board of Trustees of the Trust has adopted a proxy voting policy and procedure (the Fund
Policy), pursuant to which the Trustees have delegated proxy voting responsibility to the Funds
investment adviser and adopted the investment advisers proxy voting policies and procedures (the
Policies) which are described below. The Trustees will review the Funds proxy voting records
from time to time and will annually consider approving the Policies for the upcoming year. In the
event that a conflict of interest arises between the Funds shareholders and the investment
adviser, the administrator, or any of their affiliates or any affiliate of the Fund, the investment
adviser will generally refrain from voting the proxies related to the companies giving rise to such
conflict until it consults with the Boards Special Committee except as contemplated under the Fund
Policy. The Boards Special Committee will instruct the investment adviser on the appropriate
course of action.
The Policies are designed to promote accountability of a companys management to its shareholders
and to align the interests of management with those shareholders. An independent proxy
voting service (Agent), currently Institutional Shareholder Services, Inc., has been retained to
assist in the voting of proxies through the provision of vote analysis, implementation and
recordkeeping and disclosure services. The investment adviser will generally vote proxies through
the Agent. The Agent is required to vote all proxies and/or refer then back to the investment
adviser pursuant to the Policies. It is generally the policy of the investment adviser to vote in
accordance with the recommendation of the
Agent. The Agent shall refer to the investment adviser proxies relating to mergers and
restructurings, and the disposition of assets, termination, liquidation and mergers contained in
mutual fund proxies. The investment adviser will normally vote against anti-takeover measures and
other proposals designed to limit the ability of shareholders to act on possible transactions,
except in the case of closed-end management investment companies. The investment adviser generally
supports management on social and environmental proposals. The investment adviser may abstain from
voting from time to time where it determines that the costs associated with voting a proxy
outweighs the benefits derived from exercising the right to vote or the economic effect on
shareholders interests or the value of the portfolio holding is indeterminable or insignificant.
In addition, the investment adviser will monitor situations that may result in a conflict of
interest between the Funds shareholders and the investment adviser, the administrator, or any of
their affiliates or any affiliate of the Fund by maintaining a list of significant existing and
prospective corporate
clients. The investment advisers personnel responsible for reviewing and voting proxies on behalf
of the Fund will report any proxy received or expected to be received from a company included on
that list to the personal of the investment adviser identified in the Policies. If such personnel
expects to instruct the Agent to vote such proxies in a manner inconsistent with the guidelines of
the Policies or the recommendation of the Agent, the personnel will consult with members of senior
management of the investment adviser to determine if a material conflict of interests exists. If
it is determined that a material conflict does exist, the investment adviser will seek instruction
on how to vote from the Special Committee.
Information on how the Fund voted proxies relating to portfolio securities during the most recent
12 month period ended June 30 is available (1) without charge, upon request, by calling
1-800-262-1122, and (2) on the Securities and Exchange Commissions website at http://www.sec.gov.
Item 8. Portfolio Managers of Closed-End Management Investment Companies
Effective October 20, 2009, EVM assumed responsibility for the options management of the Fund,
replacing Rampart Investment Management Company, Inc. Walter A. Row and Michael A. Allison remain
the portfolio managers responsible for the day-to-day management of the Funds investment
portfolio.
Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated
Purchasers
No such purchases this period.
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 registrants principal executive officer and principal
financial officer that the effectiveness of the registrants 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 Commissions rules and forms and that the information required to be disclosed by
the registrant has been accumulated and communicated to the registrants principal executive
officer and principal financial officer in order to allow timely decisions regarding required
disclosure.
(b) There have been no changes in the registrants internal controls over financial reporting
during the second fiscal quarter of the period covered by this report that has materially affected,
or is reasonably likely to materially affect, the registrants internal control over financial
reporting.
Item 12. Exhibits
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(a)(1) |
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Registrants Code of Ethics Not applicable (please see Item 2). |
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(a)(2)(i) |
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Treasurers Section 302 certification. |
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(a)(2)(ii) |
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Presidents Section 302 certification. |
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(b) |
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Combined Section 906 certification. |
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(c) |
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Registrants notices to shareholders pursuant to Registrants exemptive order granting an
exemption from Section 19(b) of the 1940 Act and Rule 19b-1 thereunder regarding distributions paid
pursuant to the Registrants Managed Distribution Plan. |
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 Enhanced Equity Income Fund
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By:
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/s/ Duncan W. Richardson |
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Duncan W. Richardson
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President |
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Date:
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May 13, 2010 |
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Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act
of 1940, this report has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated.
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By:
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/s/ Barbara E. Campbell |
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Barbara E. Campbell
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Treasurer |
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Date:
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May 13, 2010 |
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By:
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/s/ Duncan W. Richardson |
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Duncan W. Richardson
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President |
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Date:
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May 13, 2010 |
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