EATON VANCE HIGH YIELD MUNICIPAL INCOME FUND
Supplement to Prospectus
dated June 1, 2020
EATON VANCE NATIONAL LIMITED MATURITY MUNICIPAL INCOME
FUND
EATON VANCE NEW YORK MUNICIPAL OPPORTUNITIES FUND
EATON VANCE SHORT DURATION MUNICIPAL OPPORTUNITIES FUND
Supplement to Prospectuses dated August 1, 2020
EATON VANCE FLOATING-RATE MUNICIPAL INCOME FUND
Supplement to Prospectus dated August 1, 2020, as
revised February 8, 2021
EATON VANCE ARIZONA MUNICIPAL INCOME FUND
EATON VANCE CONNECTICUT MUNICIPAL INCOME FUND
EATON VANCE MINNESOTA MUNICIPAL INCOME FUND
EATON VANCE MUNICIPAL OPPORTUNITIES FUND
EATON VANCE NEW JERSEY MUNICIPAL INCOME FUND
EATON VANCE PENNSYLVANIA MUNICIPAL INCOME FUND
Supplement to Prospectus dated December 1, 2020
EATON VANCE TAXABLE MUNICIPAL BOND FUND
Supplement to Prospectus dated December 30, 2020
EATON VANCE GEORGIA MUNICIPAL INCOME FUND
EATON VANCE MARYLAND MUNICIPAL INCOME FUND
EATON VANCE MISSOURI MUNICIPAL INCOME FUND
EATON VANCE NORTH CAROLINA MUNICIPAL INCOME FUND
EATON VANCE OREGON MUNICIPAL INCOME FUND
EATON VANCE SOUTH CAROLINA MUNICIPAL INCOME FUND
EATON VANCE VIRGINIA MUNICIPAL INCOME FUND
Supplement to Prospectus
dated January 1, 2021
EATON VANCE AMT-FREE MUNICIPAL INCOME FUND
EATON VANCE CALIFORNIA MUNICIPAL OPPORTUNITIES FUND
EATON VANCE MASSACHUSETTS MUNICIPAL INCOME FUND
EATON VANCE NATIONAL MUNICIPAL INCOME FUND
EATON VANCE NEW YORK MUNICIPAL INCOME FUND
EATON VANCE OHIO MUNICIPAL INCOME FUND
Supplement to Prospectus
dated February 1, 2021
1. The following replaces corresponding
disclosure under “Management.” in “Management and Organization”:
Each Fund’s investment adviser is Boston Management and Research
(“BMR”) or Eaton Vance Management (“Eaton Vance”), as applicable. Each of Eaton Vance and BMR have offices
at Two International Place, Boston, MA 02110. Eaton Vance and BMR and their predecessor organizations have been managing
assets since 1924 and managing mutual funds since 1931. Prior to March 1, 2021, Eaton Vance was a wholly owned subsidiary and BMR
was an indirect wholly owned subsidiary of Eaton Vance Corp. (“EVC”).
On March 1, 2021, Morgan Stanley acquired EVC (the “Transaction”)
and Eaton Vance and BMR became indirect, wholly-owned subsidiaries of Morgan Stanley. In connection with the Transaction,
each Fund each entered into a new investment advisory agreement with its adviser. Each such agreement was approved by shareholders
prior to the consummation of the Transaction and was effective upon its closing.
Morgan Stanley (NYSE: MS), whose principal offices are at 1585 Broadway,
New York, New York 10036, is a preeminent global financial services firm engaged in securities trading and brokerage activities,
as well as providing investment banking, research and analysis, financing and financial advisory services. As of December
31, 2020, after giving effect to the Transaction as described above, Morgan Stanley’s asset management operations had aggregate
assets under management of approximately $1.4 trillion.
Effective March 1, 2021, any fee reduction agreement previously applicable
to a Fund was incorporated into its new investment advisory agreement with its investment adviser.
2. The following replaces the
first paragraph under “Payments to Financial Intermediaries.” in “Purchasing Shares”:
Payments to Financial
Intermediaries. In addition to payments disclosed under “Sales Charges” below, the principal underwriter, out
of its own resources, may make cash payments to certain financial intermediaries (which may include affiliates of the principal
underwriter and investment adviser) who provide marketing support, transaction processing and/or administrative services and, in
some cases, include some or all Eaton Vance funds in preferred or specialized selling programs. Payments made by the principal
underwriter to a financial intermediary may be significant and are typically in the form of fees based on Fund sales, assets, transactions
processed and/or accounts attributable to that financial intermediary. Financial intermediaries also may receive amounts from the
principal underwriter in connection with educational or due diligence meetings that include information concerning Eaton Vance
funds. The principal underwriter may pay or allow other promotional incentives or payments to financial intermediaries to the extent
permitted by applicable laws and regulations.
3. The following replaces “Fund
Purchases through Edward D. Jones & Co., L.P. (“Edward Jones”)” under “Appendix A – Financial
Intermediary Sales Charge Variations”:
Policies Regarding Transactions Through Edward
D. Jones & Co., L.P. (“Edward Jones”)
The following information has been provided by Edward Jones:
Effective on or after March 1, 2021, the following information supersedes
prior information with respect to transactions and positions held in fund shares through an Edward Jones system. Clients of Edward
Jones (also referred to as “shareholders”) purchasing fund shares on the Edward Jones commission and fee-based platforms
are eligible only for the following sales charge discounts (also referred to as “breakpoints”) and waivers, which can
differ from discounts and waivers described elsewhere in the mutual fund prospectus or statement of additional information (“SAI”)
or through another broker-dealer. In all instances, it is the shareholder's responsibility to inform Edward Jones at the time of
purchase of any relationship, holdings of fund family or other facts qualifying the purchaser for discounts or waivers. Edward
Jones can ask for documentation from the shareholder of such circumstance. Shareholders should contact Edward Jones if they have
questions regarding their eligibility for these discounts and waivers.
Breakpoints
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Breakpoint pricing, otherwise known as volume pricing, at dollar thresholds as described in the prospectus.
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Rights of Accumulation (“ROA”)
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The applicable sales charge on a purchase of Class A shares is determined by taking into account all share classes (except
certain money market funds and any assets held in group retirement plans) of the mutual fund family held by the shareholder or
in an account grouped by Edward Jones with other accounts for the purpose of providing certain pricing considerations (“pricing
groups”). If grouping assets as a shareholder, this includes all share classes held on the Edward Jones platform and/or held
on another platform. The inclusion of eligible fund family assets in the ROA calculation is dependent on the shareholder notifying
Edward Jones of such assets at the time of calculation. Money market funds are included only if such shares were sold with a sales
charge at the time of purchase or acquired in exchange for shares purchased with a sales charge.
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The employer maintaining a SEP IRA plan and/or SIMPLE IRA plan may elect to establish or change ROA for the IRA accounts associated
with the plan to a plan-level grouping as opposed to including all share classes at a shareholder or pricing group level.
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ROA is determined by calculating the higher of cost minus redemptions or market value (current shares x NAV).
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Letter of Intent (“LOI”)
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Through a LOI, shareholders can receive the sales charge and breakpoint discounts for purchases shareholders intend to make
over a 13-month period from the date Edward Jones receives the LOI. The LOI is determined by calculating the higher of cost or
market value of qualifying holdings at LOI initiation in combination with the value that the shareholder intends to buy over a
13-month period to calculate the front-end sales charge and any breakpoint discounts. Each purchase the shareholder makes during
that 13-month period will receive the sales charge and breakpoint discount that applies to the total amount. If during the 13-month
period the shareholder redeems any of the shares purchased pursuant to a LOI, the value of the redeemed shares will not be included
for purposes of satisfying the LOI. The inclusion of eligible fund family assets in the LOI calculation is dependent on the shareholder
notifying Edward Jones of such assets at the time of calculation. Purchases made before the LOI is received by Edward Jones are
not adjusted under the LOI and will not reduce the sales charge previously paid. Sales charges will be adjusted if LOI is not met.
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If the employer maintaining a SEP IRA plan and/or SIMPLE IRA plan has elected to establish or change ROA for the IRA accounts
associated with the plan to a plan-level grouping, LOIs will also be at the plan-level and may only be established by the employer.
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Front-end Sales Charge Waivers
Sales charges are waived for the following shareholders and
in the following situations:
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Associates of Edward Jones and its affiliates and their family members who are in the same pricing group (as determined by
Edward Jones under its policies and procedures) as the associate. This waiver will continue for the remainder of the associate's
life if the associate retires from Edward Jones in good-standing and remains in good standing pursuant to Edward Jones' policies
and procedures.
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Shares purchased in an Edward Jones fee-based program.
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Shares purchased through reinvestment of capital gains distributions and dividend reinvestment.
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Shares purchased from the proceeds of redeemed shares of the same fund family so long as the following conditions are met:
1) the proceeds are from the sale of shares within 60 days of the purchase, and 2) the sale and purchase are made in the same share
class and the same account or the purchase is made in an individual retirement account with proceeds from liquidations in a non-retirement
account.
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Shares exchanged into Class A shares from another share class so long as the exchange is into the same fund and was initiated
at the discretion of Edward Jones. Edward Jones is responsible for any remaining Contingent Deferred Sales Charge (“CDSC”)
due to the fund company or its affiliate, if applicable. Any future purchases are subject to the applicable sales charge as disclosed
in the prospectus.
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Exchanges from Class C shares to Class A shares of the same fund, generally, in the 84th month following the anniversary of
the purchase date or earlier at the discretion of Edward Jones.
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CDSC Waivers
If the shareholder purchases shares that are subject to a CDSC
and those shares are redeemed before the CDSC is expired, the shareholder is responsible to pay the CDSC except in the following
conditions:
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The death or disability of the shareholder.
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Systematic withdrawals with up to 10% per year of the account value.
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Return of excess contributions from an Individual Retirement Account (IRA).
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Shares sold as part of a required minimum distribution for IRA and retirement accounts if the redemption is taken in or after
the year the shareholder reaches qualified age based on applicable IRS regulations.
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Shares sold to pay Edward Jones fees or costs in such cases where the transaction is initiated by Edward Jones. Edward Jones
is responsible for any remaining CDSC due to the fund company or its affiliate, if applicable.
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Shares exchanged in an Edward Jones fee-based program. Edward Jones is responsible for any remaining CDSC due to the fund company
or its affiliate, if applicable.
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Shares acquired through NAV reinstatement.
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Shares redeemed at the discretion of Edward Jones for Minimum Balances as described below.
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Other Important Information Regarding Transactions Through Edward Jones
Minimum Purchase Amounts
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Initial purchase minimum: $250
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Subsequent purchase minimum: none
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Minimum Balances
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Edward Jones has the right to redeem at its discretion fund holdings with a balance of $250 or less. The following are examples
of accounts that are not included in this policy:
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A fee-based account held on an Edward Jones platform
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A 529 account held on an Edward Jones platform
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An account with an active systematic investment plan or LOI
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Exchanging Share Classes
At any time it deems necessary, Edward Jones has the authority to exchange
at NAV a shareholder's holdings in a fund to Class A shares of the same fund. Edward Jones is responsible for any remaining CDSC
due to the fund company or its affiliate, if applicable. Any future purchases are subject to the applicable sales charge as disclosed
in the prospectus.
March 1, 2021
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37966 3.1.21
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EATON VANCE HIGH YIELD MUNICIPAL INCOME FUND
Supplement to Statement of Additional Information
(“SAI”) dated June 1, 2020
EATON VANCE FLOATING-RATE MUNICIPAL INCOME FUND
EATON VANCE NATIONAL LIMITED MATURITY MUNICIPAL INCOME
FUND
EATON VANCE NEW YORK MUNICIPAL OPPORTUNITIES FUND
EATON VANCE SHORT DURATION MUNICIPAL OPPORTUNITIES FUND
Supplement to SAIs dated August 1, 2020
EATON VANCE ARIZONA MUNICIPAL INCOME FUND
EATON VANCE CONNECTICUT MUNICIPAL INCOME FUND
EATON VANCE MINNESOTA MUNICIPAL INCOME FUND
EATON VANCE MUNICIPAL OPPORTUNITIES FUND
EATON VANCE NEW JERSEY MUNICIPAL INCOME FUND
EATON VANCE PENNSYLVANIA MUNICIPAL INCOME FUND
Supplement to SAI dated December 1, 2020
EATON VANCE TAXABLE MUNICIPAL BOND FUND
Supplement to SAI dated December 30, 2020
EATON VANCE GEORGIA MUNICIPAL INCOME FUND
EATON VANCE MARYLAND MUNICIPAL INCOME FUND
EATON VANCE MISSOURI MUNICIPAL INCOME FUND
EATON VANCE NORTH CAROLINA MUNICIPAL INCOME FUND
EATON VANCE OREGON MUNICIPAL INCOME FUND
EATON VANCE SOUTH CAROLINA MUNICIPAL INCOME FUND
EATON VANCE VIRGINIA MUNICIPAL INCOME FUND
Supplement to SAI dated January 1, 2021
EATON VANCE AMT-FREE MUNICIPAL INCOME FUND
EATON VANCE CALIFORNIA MUNICIPAL OPPORTUNITIES FUND
EATON VANCE MASSACHUSETTS MUNICIPAL INCOME FUND
EATON VANCE NATIONAL MUNICIPAL INCOME FUND
EATON VANCE NEW YORK MUNICIPAL INCOME FUND
EATON VANCE OHIO MUNICIPAL INCOME FUND
Supplement to SAI dated February 1, 2021
1. The following replaces the
first paragraph under “Fund Management.” in “Management and Organization”:
Fund Management.
The Trustees of the Trust are responsible for the overall management and supervision of the affairs
of the Trust. The Board members and officers of the Trust are listed below. Except as indicated, each individual has held the office
shown or other offices in the same company for the last five years. Board members hold indefinite terms of office. Each Trustee
holds office until his or her successor is elected and qualified, subject to a prior death, resignation, retirement, disqualification
or removal. Under the terms of each Fund’s Trustee retirement policy, an Independent Trustee must retire and resign
as a Trustee on the earlier of: (i) the first day of July following his or her 74th birthday; or (ii), with limited exception,
December 31st of the 20th year in which he or she has served as a Trustee. However, if such retirement and resignation would cause
each Fund to be out of compliance with Section 16 of the 1940 Act or any other regulations or guidance of the SEC, then such
retirement and resignation will not become effective until such time as action has been taken for each Fund to be in compliance
therewith. The “noninterested Trustees” consist of those Trustees who are not “interested persons” of the
Trust, as that term is defined under the 1940 Act. The business address of each Board member and officer is Two International Place,
Boston, Massachusetts 02110. As used in this SAI, “EVC” refers to Eaton Vance Corp., “EV” refers to Eaton
Vance, Inc., “Eaton Vance” refers to Eaton Vance Management and “EVD” refers to Eaton Vance Distributors,
Inc. (see “Principal Underwriter” under “Other Service Providers”). EV is the trustee of each of Eaton
Vance and BMR. Effective March 1, 2021, each of Eaton Vance, BMR, EVD and EV are indirect wholly-owned subsidiaries of Morgan Stanley.
Each officer affiliated with Eaton Vance may hold a position with other Eaton Vance affiliates that is comparable to his or her
position with Eaton Vance listed below.
2. The following replaces the
Thomas E. Faust Jr. row in the Trustees table and in his biographical narrative in “Management and Organization”:
THOMAS E. FAUST JR.
1958
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Trustee
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Since 2007
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Chairman of Morgan Stanley Investment Management, Inc. (MSIM), Director and President of EV, Chief Executive Officer and President of Eaton Vance and BMR, and Director of EVD. Formerly, Chairman, Chief Executive Officer and President of EVC. Trustee and/or officer of 141 registered investment companies. Mr. Faust is an interested person because of his positions with MSIM, BMR, Eaton Vance, EVD and EV, which are affiliates of the Trust, and his former position with EVC, which was an affiliate of the Trust prior to March 1, 2021.
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141
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Formerly, Director of EVC (2007-2021) and Hexavest Inc. (2012-2021) (investment management firm).
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Thomas E. Faust
Jr. Mr. Faust has served as a member of the Eaton Vance Fund Boards since 2007. Effective March 1, 2021, he is Chairman
of MSIM. He is also Director and President of EV, Chief Executive Officer and President of Eaton Vance and BMR, and Director of
EVD. Mr. Faust previously served as Chairman and Chief Executive Officer of EVC from 2007 through March 1, 2021 and as President
of EVC from 2006 through March 1, 2021. Mr. Faust served as a Director of Hexavest Inc. from 2012-2021. From 2016 through 2019,
Mr. Faust served as a Director of SigFig Wealth Management LLC. Mr. Faust previously served as an equity analyst, portfolio manager,
Director of Equity Research and Management and Chief Investment Officer of Eaton Vance from 1985-2007. He holds B.S. degrees in
Mechanical Engineering and Economics from the Massachusetts Institute of Technology and an MBA from Harvard Business School. Mr.
Faust has been a Chartered Financial Analyst since 1988. He is a trustee and member of the executive committee of the Boston Symphony
Orchestra, Inc. and trustee emeritus of Wellesley College.
3. The following is added as
the first paragraph under “Investment Advisory Services” in “Investment Advisory and Administrative Services”:
As described in the Prospectus, upon the closing of the transaction by
which Morgan Stanley acquired EVC (the “Transaction”), each Fund entered into a new investment advisory agreement or
investment advisory and administrative agreement with Eaton Vance or BMR, as applicable.
4. The following replaces the
last paragraph under “Investment Advisory Services.” in “Investment Advisory and Administrative Services”:
Each Investment Advisory Agreement or Investment Advisory and Administrative
Agreement with the investment adviser continues in effect through and including the second anniversary of its execution and shall
continue in full force and effect indefinitely thereafter, but only so long as such continuance after such second anniversary is
specifically approved at least annually (i) by the vote of a majority of the noninterested Trustees of the Trust, cast in person
at a meeting specifically called for the purpose of voting on such approval and (ii) by the Board of the Trust, or by vote of a
majority of the outstanding voting securities of the Fund. Each Agreement may be terminated at any time without penalty on sixty
(60) days’ written notice by either party, or by vote of the majority of the outstanding voting securities of the Fund, and
each Agreement will terminate automatically in the event of its assignment. Each Agreement provides that the investment adviser
may render services to others. Each Agreement also provides that the investment adviser shall not be liable for any loss incurred
in connection with the performance of its duties, or action taken or omitted under the Agreement, in the absence of willful misfeasance,
bad faith, gross negligence or reckless disregard of its obligations and duties thereunder, or for any losses sustained in the
acquisition, holding or disposition of any security or other investment. Each Agreement is not intended to, and does not, confer
upon any person not a party to it any right, benefit or remedy of any nature.
5. The following replaces “Information
About BMR and Eaton Vance.” in “Investment Advisory and Administrative Services”:
Information About
BMR and Eaton Vance. BMR and Eaton Vance are business trusts organized under the laws of the Commonwealth of Massachusetts.
EV serves as trustee of BMR and Eaton Vance. As described in the Prospectus, following the closing of the Transaction on March
1, 2021, EV, Eaton Vance and BMR became indirect wholly-owned subsidiaries of Morgan Stanley (NYSE: MS), a preeminent global financial
services firm engaged in securities trading and brokerage activities, as well as providing investment banking, research and analysis,
financing and financial advisory services.
Prior to March 1, 2021, EV and Eaton Vance were wholly-owned
subsidiaries of EVC, a Maryland corporation and publicly-held holding company and BMR was an indirect wholly owned subsidiary
of EVC. EVC through its subsidiaries and affiliates engaged primarily in investment management, administration and marketing
activities. The Directors of EVC were Thomas E. Faust Jr., Ann E. Berman, Leo I. Higdon, Jr., Paula A. Johnson, Brian D.
Langstraat, Dorothy E. Puhy, Winthrop H. Smith, Jr. and Richard A. Spillane, Jr. All shares of the outstanding Voting Common
Stock of EVC were deposited in a Voting Trust, the Voting Trustees of which were Mr. Faust, Paul W. Bouchey, Craig R.
Brandon, Daniel C. Cataldo, Michael A. Cirami, Cynthia J. Clemson, James H. Evans, Maureen A. Gemma, Laurie G. Hylton, Mr.
Langstraat, Thomas Lee, Frederick S. Marius, David C. McCabe, Edward J. Perkin, Lewis R. Piantedosi, Charles B. Reed, Craig
P. Russ, Thomas C. Seto, John L. Shea, Eric A. Stein, John H. Streur, Andrew N. Sveen, Payson F. Swaffield, R. Kelly Williams
and Matthew J. Witkos (all of whom are or were officers of Eaton Vance or its affiliates). The Voting Trustees had
unrestricted voting rights for the election of Directors of EVC. Prior to March 1, 2021, all of the outstanding voting trust
receipts issued under said Voting Trust were owned by certain of the officers of BMR and Eaton Vance who may also have been
officers, or officers and Directors of EVC and EV. As indicated under “Management and Organization,” all of the
officers of the Trust (as well as Mr. Faust who is also a Trustee) are employees of Eaton Vance and/or BMR.
6. The following replaces “Compensation
Structure for Eaton Vance and BMR.” and “Method to Determine Compensation.” in “Investment Advisory and
Administrative Services”:
Compensation Structure
for Eaton Vance and BMR. Compensation of the investment adviser's and sub-adviser's (collectively as used herein, the
“investment adviser”) portfolio managers and other investment professionals has the following primary components: (1)
a base salary, (2) an annual cash bonus, and (3) annual non-cash compensation consisting of restricted shares of Morgan Stanley
stock that are subject to a fixed vesting and distribution schedule. The investment adviser’s investment professionals also
receive certain retirement, insurance and other benefits that are broadly available to the investment adviser’s employees.
Compensation of the investment adviser’s investment professionals is reviewed primarily on an annual basis. Cash bonuses,
stock-based compensation awards, and adjustments in base salary are typically paid or put into effect at or shortly after the December
31st fiscal year end of Morgan Stanley.
Method to Determine
Compensation. The investment adviser compensates its portfolio managers based primarily on the scale and complexity
of their portfolio responsibilities and the total return performance of managed funds and accounts versus the benchmark(s) stated
in the prospectus, as well as an appropriate peer group (as described below). In addition to rankings within peer groups of funds
on the basis of absolute performance, consideration may also be given to relative risk-adjusted performance. Risk-adjusted performance
measures include, but are not limited to, the Sharpe ratio, which uses standard deviation and excess return to determine reward
per unit of risk. Performance is normally based on periods ending on the September 30th preceding fiscal year end. Fund performance
is normally evaluated primarily versus peer groups of funds as determined by Lipper Inc. and/or Morningstar, Inc. When a fund’s
peer group as determined by Lipper or Morningstar is deemed by the investment adviser’s management not to provide a fair
comparison, performance may instead be evaluated primarily against a custom peer group or market index. In evaluating the performance
of a fund and its manager, primary emphasis is normally placed on three-year performance, with secondary consideration of performance
over longer and shorter periods. For funds that are tax-managed or otherwise have an objective of after-tax returns, performance
is measured net of taxes. For other funds, performance is evaluated on a pre-tax basis. For funds with an investment objective
other than total return (such as current income), consideration will also be given to the fund’s success in achieving its
objective. For managers responsible for multiple funds and accounts, investment performance is evaluated on an aggregate basis,
based on averages or weighted averages among managed funds and accounts. Funds and accounts that have performance-based advisory
fees are not accorded disproportionate weightings in measuring aggregate portfolio manager performance.
The compensation of portfolio managers with other job responsibilities (such
as heading an investment group or providing analytical support to other portfolios) will include consideration of the scope of
such responsibilities and the managers’ performance in meeting them.
The investment adviser seeks to compensate portfolio managers commensurate
with their responsibilities and performance, and competitive with other firms within the investment management industry. The investment
adviser participates in investment-industry compensation surveys and utilizes survey data as a factor in determining salary, bonus
and stock-based compensation levels for portfolio managers and other investment professionals. Salaries, bonuses and stock-based
compensation are also influenced by the operating performance of the investment adviser and Morgan Stanley. The overall annual
cash bonus pool is generally based on a substantially fixed percentage of pre-bonus adjusted operating income. While the salaries
of the investment adviser’s portfolio managers are comparatively fixed, cash bonuses and stock-based compensation may fluctuate
significantly from year to year, based on changes in manager performance and other factors as described herein. For a high performing
portfolio manager, cash bonuses and stock-based compensation may represent a substantial portion of total compensation.
7. The following replaces the
first two paragraphs in “Other Service Providers”:
Principal Underwriter.
Eaton Vance Distributors, Inc. (“EVD”), Two International Place, Boston, MA 02110 is
the principal underwriter of each Fund. The principal underwriter acts as principal in selling shares under a Distribution Agreement
with the Trust. The expenses of printing copies of prospectuses used to offer shares and other selling literature and of advertising
are borne by the principal underwriter. The fees and expenses of qualifying and registering and maintaining qualifications and
registrations of a Fund and its shares under federal and state securities laws are borne by the Fund. The Distribution Agreement
is renewable annually by the members of the Board (including a majority of the noninterested Trustees who have no direct or indirect
financial interest in the operation of the Distribution Agreement or any applicable Distribution Plan), may be terminated on sixty
days’ notice either by such Trustees or by vote of a majority of the outstanding Fund shares or on six months’ notice
by the principal underwriter and is automatically terminated upon assignment. The principal underwriter distributes shares on a
“best efforts” basis under which it is required to take and pay for only such shares as may be sold. Effective March
1, 2021, EVD is an indirect wholly-owned subsidiary of Morgan Stanley. Prior to March 1, 2021, EVD was a direct, wholly-owned subsidiary
of EVC. Mr. Faust is also a Director of EVD. EVD also serves as placement agent for the Portfolio, if applicable.
Custodian.
State Street Bank and Trust Company (“State Street”), State Street Financial Center,
One Lincoln Street, Boston, MA 02111, serves as custodian to each Fund. State Street has custody of all cash and securities of
a Fund, maintains the general ledger of each Fund and computes the daily net asset value of shares of each Fund. In such capacity
it attends to details in connection with the sale, exchange, substitution, transfer or other dealings with each Fund's investments,
receives and disburses all funds and performs various other ministerial duties upon receipt of proper instructions from the Trust.
State Street also provides services in connection with the preparation of shareholder reports and the electronic filing of such
reports with the SEC.
8. The following replaces the
corresponding disclosure in “Portfolio Securities Transactions”:
Decisions concerning the execution of portfolio security transactions,
including the selection of the market and the broker-dealer firm or other financial intermediary (each an “intermediary”),
are made by the investment adviser. Each Fund is responsible for the expenses associated with its portfolio transactions. The investment
adviser is also responsible for the execution of transactions for all other accounts managed by it. The investment adviser places
the portfolio security transactions for execution with one or more intermediaries firms. The investment adviser uses its best efforts
to obtain execution of portfolio security transactions at prices that, in the investment adviser’s judgment, are advantageous
to the client and at a reasonably competitive spread or (when a disclosed commission is being charged) at reasonably competitive
commission rates. In seeking such execution, the investment adviser will use its best judgment in evaluating the terms of a transaction,
and will give consideration to various relevant factors, which may include, without limitation, the full range and quality of the
intermediary’s services, responsiveness of the intermediary to the investment adviser, the size and type of the transaction,
the nature and character of the market for the security, the confidentiality, speed and certainty of effective execution required
for the transaction, the general execution and operational capabilities of the intermediary, the reputation, reliability, experience
and financial condition of the intermediary, the value and quality of the services rendered by the intermediary in this and other
transactions, and the amount of the spread or commission, if any. In addition, the investment adviser may consider the receipt
of Research Services (as defined below), provided it does not compromise the investment adviser’s obligation to seek best
overall execution for a Fund and is otherwise in compliance with applicable law. The investment adviser may engage in portfolio
transactions with an intermediary that sells shares of Eaton Vance funds, provided such transactions are not directed to that intermediary
as compensation for the promotion or sale of such shares.
As described in the Prospectus, following the closing of the Transaction
on March 1, 2021, the investment adviser became an “affiliated person,” as defined in the 1940 Act, of Morgan Stanley
and its affiliates, including certain intermediaries (as previously defined). As a result, the investment adviser is subject to
certain restrictions regarding transactions with Morgan Stanley-affiliated intermediaries, as set forth in the 1940 Act. Under
certain circumstances, such restrictions may limit the investment adviser’s ability to place portfolio transactions on behalf
of a Fund at the desired time or price. Any transaction the investment adviser enters into with a Morgan Stanley-affiliated intermediary
on behalf of a Fund will be done in compliance with applicable laws, rules, and regulations; will be subject to any restrictions
contained in a Fund’s investment advisory agreement; will be subject to the investment adviser’s duty to seek best
execution; and, will comply with any applicable policies and procedures of the investment adviser, as described below.
Subject to the overriding objective of obtaining the best execution of
orders and applicable rules and regulations, as described above, a Fund may use an affiliated intermediary, including a Morgan
Stanley-affiliated intermediary, to effect Fund portfolio transactions, including transactions in futures contracts and options
on futures contracts, under procedures adopted by the Board. In order to use such affiliated intermediaries, the Fund’s Board
must approve and periodically review procedures reasonably designed to ensure that commission rates and other remuneration paid
to the affiliated intermediaries are fair and reasonable in comparison to those of other intermediaries for comparable transactions
involving similar securities being purchased or sold during a comparable time period.
Pursuant to an order issued by the SEC, a Fund is permitted to engage in
principal transactions in money market instruments, subject to certain conditions, with Morgan Stanley & Co. LLC, a broker-dealer
affiliated with Morgan Stanley.
Municipal obligations, including state obligations, purchased and sold by
each Fund are generally traded in the over-the-counter market on a net basis (i.e., without commission) through intermediaries
acting for their own account rather than as brokers, or otherwise involve transactions directly with the issuer of such obligations.
Such intermediaries attempt to profit from such transactions by buying at the bid price and selling at the higher asked price of
the market for such obligations, and the difference between the bid and asked price is customarily referred to as the spread. Each
Fund may also purchase municipal obligations from underwriters, and dealers in fixed-price offerings, the cost of which may include
undisclosed fees and concessions to the underwriters. On occasion it may be necessary or appropriate to purchase or sell a security
through a broker on an agency basis, in which case the Fund will incur a brokerage commission. Although spreads or commissions
on portfolio security transactions will, in the judgment of the investment adviser, be reasonable in relation to the value of the
services provided, spreads or commissions exceeding those which another firm might charge may be paid to intermediaries who were
selected to execute transactions on behalf of each Fund and the investment adviser’s other clients for providing brokerage
and research services to the investment adviser as permitted by applicable law.
Research Services provided by (and produced by) broker-dealers that execute
portfolio transactions or from affiliates of executing broker-dealers are referred to as “Proprietary Research.” Except
for trades executed in jurisdictions where such consideration is not permissible, the investment adviser may and does consider
the receipt of Proprietary Research Services as a factor in selecting broker dealers to execute client portfolio transactions,
provided it does not compromise the investment adviser’s obligation to seek best overall execution. In jurisdictions where
permissible, the investment adviser also may consider the receipt of Research Services under so called “client commission
arrangements” or “commission sharing arrangements” (both referred to as “CCAs”) as a factor in selecting
broker dealers to execute transactions, provided it does not compromise the investment adviser’s obligation to seek best
overall execution. Under a CCA arrangement, the investment adviser may cause client accounts to effect transactions through a broker-dealer
and request that the broker-dealer allocate a portion of the commissions paid on those transactions to a pool of commission credits
that are paid to other firms that provide Research Services to the investment adviser. Under a CCA, the broker-dealer that provides
the Research Services need not execute the trade. Participating in CCAs may enable the investment adviser to consolidate payments
for research using accumulated client commission credits from transactions executed through a particular broker-dealer to periodically
pay for Research Services obtained from and provided by other firms, including other broker-dealers that supply Research Services.
The investment adviser believes that CCAs offer the potential to optimize the execution of trades and the acquisition of a variety
of high quality Research Services that the investment adviser might not be provided access to absent CCAs. The investment adviser
may enter into CCA arrangements with a number of broker-dealers and other firms, including certain affiliates of the investment
adviser. The investment adviser will only enter into and utilize CCAs to the extent permitted by Section 28(e) and other applicable
law.
The investment companies sponsored by the investment adviser or certain
of its affiliates also may allocate brokerage commissions to acquire information relating to the
performance, fees and expenses of such companies and other investment companies, which information is used by the members
of the Board of such companies to fulfill their responsibility to oversee the quality of the services provided to various entities,
including the investment adviser, to such companies. Such companies may also pay cash for such information.
Municipal obligations considered as investments
for each Fund, may also be appropriate for other investment accounts managed by the investment adviser or certain of its affiliates.
Whenever decisions are made to buy or sell securities by each Fund and one or more of such other accounts simultaneously, the investment
adviser will allocate the security transactions (including “new” issues) in a manner which it believes to be equitable
under the circumstances. As a result of such allocations, there may be instances where each Fund will not participate in a transaction
that is allocated among other accounts. If an aggregated order cannot be filled completely, allocations will generally be made
on a pro rata basis. An order may not be allocated on a pro rata basis where, for example: (i) consideration is given to portfolio
managers who have been instrumental in developing or negotiating a particular investment; (ii) consideration is given to an account
with specialized investment policies that coincide with the particulars of a specific investment; (iii) pro rata allocation would
result in odd-lot or de minimis amounts being allocated to a portfolio or other client; or (iv) where the investment adviser reasonably
determines that departure from a pro rata allocation is advisable. While these aggregation and allocation policies could have a
detrimental effect on the price or amount of the securities available to each Fund from time to time, it is the opinion
of the members of the Board that the benefits from the investment adviser organization outweigh any disadvantage that may arise
from exposure to simultaneous transactions.
9. The following is added as
a new section immediately prior to “Financial Statements”:
POTENTIAL CONFLICTS OF INTEREST
As a diversified global financial services firm, Morgan Stanley engages
in a broad spectrum of activities, including financial advisory services, investment management activities, lending, commercial
banking, sponsoring and managing private investment funds, engaging in broker-dealer transactions and principal securities, commodities
and foreign exchange transactions, research publication and other activities. In the ordinary course of its business, Morgan Stanley
is a full-service investment banking and financial services firm and therefore engages in activities where Morgan Stanley’s
interests or the interests of its clients may conflict with the interests of a Fund or Portfolio, if applicable, (collectively
for the purposes of this section, “Fund” or “Funds”). Morgan Stanley advises clients and sponsors, manages
or advises other investment funds and investment programs, accounts and businesses (collectively, together with the Funds, any
new or successor funds, programs, accounts or businesses, the ‘‘Affiliated Investment Accounts’’) with
a wide variety of investment objectives that in some instances may overlap or conflict with a Fund’s investment objectives
and present conflicts of interest. In addition, Morgan Stanley may also from time to time create new or successor Affiliated Investment
Accounts that may compete with a Fund and present similar conflicts of interest. The discussion below enumerates certain actual,
apparent and potential conflicts of interest. There is no assurance that conflicts of interest will be resolved in favor of Fund
shareholders and, in fact, they may not be. Conflicts of interest not described below may also exist.
Material Non-public
and Other Information. It is expected that confidential or material non-public information regarding an investment or potential
investment opportunity may become available to the investment adviser. If such information becomes available, the investment adviser
may be precluded (including by applicable law or internal policies or procedures) from pursuing an investment or disposition opportunity
with respect to such investment or investment opportunity.
The investment adviser may also from time to time be subject to contractual
‘‘stand-still’’ obligations and/or confidentiality obligations that may restrict its ability to trade in
certain investments on a Fund’s behalf. In addition, the investment adviser may be precluded from disclosing such information
to an investment team, even in circumstances in which the information would be beneficial if disclosed. Therefore, the investment
team may not be provided access to material non-public information in the possession of Morgan Stanley that might be relevant to
an investment decision to be made on behalf of a Fund, and the investment team may initiate a transaction or sell an investment
that, if such information had been known to it, may not have been undertaken. In addition, certain members of the investment team
may be recused from certain investment-related discussions so that such members do not receive information that would limit their
ability to perform functions of their employment with the investment adviser or its affiliates unrelated to that of a Fund. Furthermore,
access to certain parts of Morgan Stanley may be subject to third party confidentiality obligations and to information barriers
established by Morgan Stanley in order to manage potential conflicts of interest and regulatory restrictions, including without
limitation joint transaction restrictions pursuant to the 1940 Act. Accordingly, the investment adviser’s ability to source
investments from other business units within Morgan Stanley may be limited and there can be no assurance that the investment adviser
will be able to source any investments from any one or more parts of the Morgan Stanley network.
The investment adviser may restrict its investment decisions and activities
on behalf of the Funds in various circumstances, including because of applicable regulatory requirements or information held by
the investment adviser or Morgan Stanley. The investment adviser might not engage in transactions or other activities for, or enforce
certain rights in favor of, a Fund due to Morgan Stanley’s activities outside the Funds. In instances where trading of an
investment is restricted, the investment adviser may not be able to purchase or sell such investment on behalf of a Fund, resulting
in the Fund’s inability to participate in certain desirable transactions. This inability to buy or sell an investment could
have an adverse effect on a Fund’s portfolio due to, among other things, changes in an investment’s value during the
period its trading is restricted. Also, in situations where the investment adviser is required to aggregate its positions with
those of other Morgan Stanley business units for position limit calculations, the investment adviser may have to refrain from making
investments due to the positions held by other Morgan Stanley business units or their clients. There may be other situations where
the investment adviser refrains from making an investment due to additional disclosure obligations, regulatory requirements, policies,
and reputational risk, or the investment adviser may limit purchases or sales of securities in respect of which Morgan Stanley
is engaged in an underwriting or other distribution capacity.
Morgan Stanley has established certain information barriers and other
policies to address the sharing of information between different businesses within Morgan Stanley. As a result of information barriers,
the investment adviser generally will not have access, or will have limited access, to certain information and personnel in other
areas of Morgan Stanley relating to business transactions for clients (including transactions in investing, banking, prime brokerage
and certain other areas), and generally will not manage the Funds with the benefit of the information held by such other areas.
Morgan Stanley, due to its access to and knowledge of funds, markets and securities based on its prime brokerage and other businesses,
may make decisions based on information or take (or refrain from taking) actions with respect to interests in investments of the
kind held (directly or indirectly) by the Funds in a manner that may be adverse to the Funds, and will not have any obligation
or other duty to share information with the investment adviser.
In limited circumstances, however, including for purposes of managing
business and reputational risk, and subject to policies and procedures, Morgan Stanley personnel, including personnel of the investment
adviser, on one side of an information barrier may have access to information and personnel on the other side of the information
barrier through “wall crossings.” The investment adviser faces conflicts of interest in determining whether to engage
in such wall crossings. Information obtained in connection with such wall crossings may limit or restrict the ability of the investment
adviser to engage in or otherwise effect transactions on behalf of the Funds (including purchasing or selling securities that the
investment adviser may otherwise have purchased or sold for a Fund in the absence of a wall crossing). In managing conflicts of
interest that arise because of the foregoing, the investment adviser generally will be subject to fiduciary requirements. The investment
adviser may also implement internal information barriers or ethical walls, and the conflicts described herein with respect to information
barriers and otherwise with respect to Morgan Stanley and the investment adviser will also apply internally within the investment
adviser. As a result, a Fund may not be permitted to transact in (e.g., dispose of a security in whole or in part) during periods
when it otherwise would have been able to do so, which could adversely affect a Fund. Other investors in the security that are
not subject to such restrictions may be able to transact in the security during such periods. There may also be circumstances in
which, as a result of information held by certain portfolio management teams in the investment adviser, the investment adviser
limits an activity or transaction for a Fund, including if the Fund is managed by a portfolio management team other than the team
holding such information.
Investments by Morgan
Stanley and its Affiliated Investment Accounts. In serving in multiple capacities to Affiliated Investment Accounts, Morgan
Stanley, including the investment adviser and its investment teams, may have obligations to other clients or investors in Affiliated
Investment Accounts, the fulfillment of which may not be in the best interests of a Fund or its shareholders. A Fund’s investment
objectives may overlap with the investment objectives of certain Affiliated Investment Accounts. As a result, the members of an
investment team may face conflicts in the allocation of suitable investment opportunities among a Fund and other investment funds,
programs, accounts and businesses advised by or affiliated with the investment adviser. Certain Affiliated Investment Accounts
may provide for higher management or incentive fees or greater expense reimbursements or overhead allocations, all of which may
contribute to this conflict of interest and create an incentive for the investment adviser to favor such other accounts.
Morgan Stanley currently invests and plans to continue to invest on its
own behalf and on behalf of its Affiliated Investment Accounts in a wide variety of investment opportunities globally. Morgan Stanley
and its Affiliated Investment Accounts, to the extent consistent with applicable law and policies and procedures, will be permitted
to invest in investment opportunities without making such opportunities available to a Fund beforehand. Subject to the foregoing,
Morgan Stanley may offer investments that fall into the investment objectives of an Affiliated Investment Account to such account
or make such investment on its own behalf, even though such investment also falls within a Fund’s investment objectives.
A Fund may invest in opportunities that Morgan Stanley and/or one or more Affiliated Investment Accounts has declined, and vice
versa. All of the foregoing may reduce the number of investment opportunities available to a Fund and may create conflicts of interest
in allocating investment opportunities. Investors should note that the conflicts inherent in making such allocation decisions may
not always be resolved to a Fund’s advantage. There can be no assurance that a Fund will have an opportunity to participate
in certain opportunities that fall within their investment objectives.
To seek to reduce potential conflicts of interest and to attempt to allocate
such investment opportunities in a fair and equitable manner, the investment adviser has implemented allocation policies and procedures.
These policies and procedures are intended to give all clients of the investment adviser, including the Funds, fair access to investment
opportunities consistent with the requirements of organizational documents, investment strategies, applicable laws and regulations,
and the fiduciary duties of the investment adviser. Each client of the investment adviser that is subject to the allocation policies
and procedures, including each Fund, is assigned an investment team and portfolio manager(s) by the investment adviser. The investment
team and portfolio managers review investment opportunities and will decide with respect to the allocation of each opportunity
considering various factors and in accordance with the allocation policies and procedures. The allocation policies and procedures
are subject to change. Investors should note that the conflicts inherent in making such allocation decisions may not always be
resolved to the advantage of a Fund.
It is possible that Morgan Stanley or an Affiliated Investment Account,
including another Eaton Vance fund, will invest in or advise a company that is or becomes a competitor of a company of which a
Fund holds an investment. Such investment could create a conflict between the Fund, on the one hand, and Morgan Stanley or the
Affiliated Investment Account, on the other hand. In such a situation, Morgan Stanley may also have a conflict in the allocation
of its own resources to the portfolio investment. Furthermore, certain Affiliated Investment Accounts will be focused primarily
on investing in other funds which may have strategies that overlap and/or directly conflict and compete with a Fund.
In addition, certain investment professionals who are involved in a Fund’s
activities remain responsible for the investment activities of other Affiliated Investment Accounts managed by the investment adviser
and its affiliates, and they will devote time to the management of such investments and other newly created Affiliated
Investment Accounts (whether in the form of funds, separate accounts or other vehicles), as well as their own investments. In addition,
in connection with the management of investments for other Affiliated Investment Accounts, members of Morgan Stanley and its affiliates
may serve on the boards of directors of or advise companies which may compete with a Fund’s portfolio investments. Moreover,
these Affiliated Investment Accounts managed by Morgan Stanley and its affiliates may pursue investment opportunities that may
also be suitable for a Fund.
It should be noted that Morgan Stanley may, directly or indirectly, make
large investments in certain of its Affiliated Investment Accounts, and accordingly Morgan Stanley’s investment in a Fund
may not be a determining factor in the outcome of any of the foregoing conflicts. Nothing herein restricts or in any way limits
the activities of Morgan Stanley, including its ability to buy or sell interests in, or provide financing to, equity and/or debt
instruments, funds or portfolio companies, for its own accounts or for the accounts of Affiliated Investment Accounts or other
investment funds or clients in accordance with applicable law.
Different clients of the investment adviser, including a Fund, may invest
in different classes of securities of the same issuer, depending on the respective clients’ investment objectives and policies.
As a result, the investment adviser and its affiliates, at times, will seek to satisfy fiduciary obligations to certain clients
owning one class of securities of a particular issuer by pursuing or enforcing rights on behalf of those clients with respect to
such class of securities, and those activities may have an adverse effect on another client which owns a different class of securities
of such issuer. For example, if one client holds debt securities of an issuer and another client holds equity securities of the
same issuer, if the issuer experiences financial or operational challenges, the investment adviser and its affiliates may seek
a liquidation of the issuer on behalf of the client that holds the debt securities, whereas the client holding the equity securities
may benefit from a reorganization of the issuer. Thus, in such situations, the actions taken by the investment adviser or its affiliates
on behalf of one client can negatively impact securities held by another client. These conflicts also exist as between the investment
adviser’s clients, including the Funds, and the Affiliated Investment Accounts managed by Morgan Stanley.
The investment adviser and its affiliates may give advice and recommend
securities to other clients which may differ from advice given to, or securities recommended or bought for, a Fund even though
such other clients’ investment objectives may be similar to those of the Fund.
The investment adviser and its affiliates manage long and short portfolios.
The simultaneous management of long and short portfolios creates conflicts of interest in portfolio management and trading in that
opposite directional positions may be taken in client accounts managed by the same investment team, and creates risks such as:
(i) the risk that short sale activity could adversely affect the market value of long positions in one or more portfolios (and
vice versa) and (ii) the risks associated with the trading desk receiving opposing orders in the same security simultaneously.
The investment adviser and its affiliates have adopted policies and procedures that are reasonably designed to mitigate these conflicts.
In certain circumstances, the investment adviser invest on behalf of itself in securities and other instruments that would be appropriate
for, held by, or may fall within the investment guidelines of its clients, including a Fund. At times, the investment adviser will
give advice or take action for its own accounts that differs from, conflicts with, or is adverse to advice given or action taken
for any client.
From time to time, conflicts also arise due to the fact that certain securities
or instruments maybe held in some client accounts, including a Fund, but not in others, or the client accounts may have different
levels of holdings in certain securities or instruments, and because the accounts pay different levels of fees to the investment
adviser. In addition, at times an investment adviser investment team will give advice or take action with respect to the investments
of one or more clients that is not given or taken with respect to other clients with similar investment programs, objectives, and
strategies. Accordingly, clients with similar strategies will not always hold the same securities or instruments or achieve the
same performance. The investment adviser’s investment teams also advise clients with conflicting programs, objectives or
strategies. These conflicts also exist as between the investment adviser’s clients, including the Funds, and the Affiliated
Investment Accounts managed by Morgan Stanley.
The investment adviser maintains separate trading desks by investment
team and generally based on asset class, including two trading desks trading equity securities. These trading desks operate independently
of one another. The two equity trading desks do not share information. The separate equity trading desks may result in one desk
competing against the other desk when implementing buy and sell transactions, possibly causing certain accounts to pay more or
receive less for a security than other accounts. In addition, Morgan Stanley and its affiliates maintain separate trading desks
that operate independently of each other and do not share information with the investment adviser. The Morgan Stanley and affiliate
trading desks may compete against the investment adviser trading desks when implementing buy and sell transactions, possibly causing
certain Affiliated Investment Accounts to pay more or receive less for a security than other Affiliated Investment Accounts.
Payments to Broker-Dealers
and Other Financial Intermediaries. The investment adviser and/or EVD may pay compensation, out of their own funds and not
as an expense of the Funds, to certain financial intermediaries (which may include affiliates of the investment adviser and EVD),
including recordkeepers and administrators of various deferred compensation plans, in connection with the sale, distribution, marketing
and retention of shares of the Funds and/or shareholder servicing. For example, the investment adviser or EVD may pay additional
compensation to a financial intermediary for, among other things, promoting the sale and distribution of Fund shares, providing
access to various programs, mutual fund platforms or preferred or recommended mutual fund lists that may be offered by a financial
intermediary, granting EVD access to a financial intermediary’s financial advisors and consultants, providing assistance
in the ongoing education and training of a financial intermediary’s financial personnel, furnishing marketing support, maintaining
share balances and/or for sub-accounting, recordkeeping, administrative, shareholder or transaction processing services. Such payments
are in addition to any distribution fees, shareholder servicing fees and/or transfer agency fees that may be payable by the Funds.
The additional payments may be based on various factors, including level of sales (based on gross or net sales or some specified
minimum sales or some other similar criteria related to sales of the Funds and/or some or all other Eaton Vance funds), amount
of assets invested by the financial intermediary’s customers (which could include current or aged assets of the Funds and/or
some or all other Eaton Vance funds), a Fund’s advisory fee, some other agreed upon amount or other measures as determined
from time to time by the investment adviser and/or EVD. The amount of these payments may be different for different financial intermediaries.
The prospect of receiving, or the receipt of, additional compensation,
as described above, by financial intermediaries may provide such financial intermediaries and their financial advisors and other
salespersons with an incentive to favor sales of shares of the Funds over other investment options with respect to which these
financial intermediaries do not receive additional compensation (or receives lower levels of additional compensation). These payment
arrangements, however, will not change the price that an investor pays for shares of the Funds or the amount that the Funds receive
to invest on behalf of an investor. Investors may wish to take such payment arrangements into account when considering and evaluating
any recommendations relating to Fund shares and should review carefully any disclosures provided by financial intermediaries as
to their compensation.
Morgan Stanley Trading
and Principal Investing Activities. Notwithstanding anything to the contrary herein, Morgan Stanley will generally conduct
its sales and trading businesses, publish research and analysis, and render investment advice without regard for a Fund’s
holdings, although these activities could have an adverse impact on the value of one or more of the Fund’s investments, or
could cause Morgan Stanley to have an interest in one or more portfolio investments that is different from, and potentially adverse
to that of a Fund. Furthermore, from time to time, the investment adviser or its affiliates may invest “seed” capital
in a Fund, typically to enable the Fund to commence investment operations and/or achieve sufficient scale. The investment adviser
and its affiliates may hedge such seed capital exposure by investing in derivatives or other instruments expected to produce offsetting
exposure. Such hedging transactions, if any, would occur outside of a Fund.
Morgan Stanley’s sales and trading, financing and principal investing
businesses (whether or not specifically identified as such, and including Morgan Stanley’s trading and principal investing
businesses) will not be required to offer any investment opportunities to a Fund. These businesses may encompass, among other things,
principal trading activities as well as principal investing.
Morgan Stanley’s sales and trading, financing and principal investing
businesses have acquired or invested in, and in the future may acquire or invest in, minority and/or majority control positions
in equity or debt instruments of diverse public and/or private companies. Such activities may put Morgan Stanley in a position
to exercise contractual, voting or creditor rights, or management or other control with respect to securities or loans of portfolio
investments or other issuers, and in these instances Morgan Stanley may, in its discretion and subject to applicable law, act to
protect its own interests or interests of clients, and not a Fund’s interests.
Subject to the limitations of applicable law, a Fund may purchase from
or sell assets to, or make investments in, companies in which Morgan Stanley has or may acquire an interest, including as an owner,
creditor or counterparty.
Morgan Stanley’s
Investment Banking Activities. Morgan Stanley advises clients on a variety of mergers, acquisitions, restructuring, bankruptcy
and financing transactions. Morgan Stanley may act as an advisor to clients, including other investment funds that may compete
with a Fund and with respect to investments that a Fund may hold. Morgan Stanley may give advice and take action with respect to
any of its clients or proprietary accounts that may differ from the advice given, or may involve an action of a different timing
or nature than the action taken, by a Fund. Morgan Stanley may give advice and provide recommendations to persons competing with
a Fund and/or any of a Fund’s investments that are contrary to the Fund’s best interests and/or the best interests
of any of its investments.
Morgan Stanley could be engaged in financial advising, whether on the
buy-side or sell-side, or in financing or lending assignments that could result in Morgan Stanley’s determining in its discretion
or being required to act exclusively on behalf of one or more third parties, which could limit a Fund’s ability to transact
with respect to one or more existing or potential investments. Morgan Stanley may have relationships with third-party funds, companies
or investors who may have invested in or may look to invest in portfolio companies, and there could be conflicts between a Fund’s
best interests, on the one hand, and the interests of a Morgan Stanley client or counterparty, on the other hand.
To the extent that Morgan Stanley advises creditor or debtor companies
in the financial restructuring of companies either prior to or after filing for protection under Chapter 11 of the U.S. Bankruptcy
Code or similar laws in other jurisdictions, the investment adviser’s flexibility in making investments in such restructurings
on a Fund’s behalf may be limited. Morgan Stanley could provide investment banking services to competitors of portfolio companies,
as well as to private equity and/or private credit funds; such activities may present Morgan Stanley with a conflict of interest
vis-a-vis a Fund’s investment and may also result in a conflict in respect of the allocation of investment banking resources
to portfolio companies.
To the extent permitted by applicable law, Morgan Stanley may provide
a broad range of financial services to companies in which a Fund invests, including strategic and financial advisory services,
interim acquisition financing and other lending and underwriting or placement of securities, and Morgan Stanley generally will
be paid fees (that may include warrants or other securities) for such services. Morgan Stanley will not share any of the foregoing
interest, fees and other compensation received by it (including, for the avoidance of doubt, amounts received by the investment
adviser) with a Fund, and any advisory fees payable will not be reduced thereby.
Morgan Stanley may be engaged to act as a financial advisor to a company
in connection with the sale of such company, or subsidiaries or divisions thereof, may represent potential buyers of businesses
through its mergers and acquisition activities and may provide lending and other related financing services in connection with
such transactions. Morgan Stanley’s compensation for such activities is usually based upon realized consideration and is
usually contingent, in substantial part, upon the closing of the transaction. Under these circumstances, a Fund may be precluded
from participating in a transaction with or relating to the company being sold or participating in any financing activity related
to merger or acquisition.
To meet applicable regulatory requirements, there are periods when the
investment adviser will not engage in certain types of transactions in the securities of companies for which a broker-dealer affiliated
with Morgan Stanley is performing investment banking services. Fund shareholders will not receive notice of such instances. In
particular, when a broker-dealer affiliated with Morgan Stanley is engaged in an underwriting or other distribution of securities
of a company, the investment adviser may be prohibited from purchasing such securities on behalf of a Fund. In addition, under
certain circumstances, the investment adviser generally will not initiate transactions in the securities of companies with respect
to which affiliates of the investment adviser may have controlling interests or are affiliated.
The investment adviser believes that the nature and range of clients to
whom Morgan Stanley and its subsidiaries render investment banking and other services is such that it would be inadvisable to exclude
these companies from the Fund’s portfolio.
Morgan Stanley’s
Marketing Activities. Morgan Stanley is engaged in the business of underwriting, syndicating, brokering, administering,
servicing, arranging and advising on the distribution of a wide variety of securities and other investments in which a Fund may
invest. Subject to the restrictions of the 1940 Act, including Sections 10(f) and 17(e) thereof, a Fund may invest in transactions
in which Morgan Stanley acts as underwriter, placement agent, syndicator, broker, administrative agent, servicer, advisor, arranger
or structuring agent and receives fees or other compensation from the sponsors of such products or securities. Any fees earned
by Morgan Stanley in such capacity will not be shared with the investment adviser or the Funds. Certain conflicts of interest,
in addition to the receipt of fees or other compensation, would be inherent in these transactions. Moreover, the interests of one
of Morgan Stanley’s clients with respect to an issuer of securities in which a Fund has an investment may be adverse to the
investment adviser’s or a Fund’s best interests. In conducting the foregoing activities, Morgan Stanley will be acting
for its other clients and will have no obligation to act in the investment adviser’s or a Fund’s best interests.
Client Relationships.
Morgan Stanley has existing and potential relationships with a significant number of corporations, institutions and individuals.
In providing services to its clients, Morgan Stanley may face conflicts of interest with respect to activities recommended to or
performed for such clients, on the one hand, and a Fund, its shareholders or the entities in which the Fund invests, on the other
hand. In addition, these client relationships may present conflicts of interest in determining whether to offer certain investment
opportunities to a Fund.
In acting as principal or in providing advisory and other services to
its other clients, Morgan Stanley may engage in or recommend activities with respect to a particular matter that conflict with
or are different from activities engaged in or recommended by the investment adviser on a Fund’s behalf.
Principal Investments.
To the extent permitted by applicable law, there may be situations in which a Fund’s interests may conflict with the
interests of one or more general accounts of Morgan Stanley and its affiliates or accounts managed by Morgan Stanley or its affiliates.
This may occur because these accounts hold public and private debt and equity securities of many issuers which may be or become
portfolio companies, or from whom portfolio companies may be acquired.
Transactions with
Portfolio Companies of Affiliated Investment Accounts. The companies in which a Fund may invest may be counterparties to
or participants in agreements, transactions or other arrangements with portfolio companies or other entities of portfolio investments
of Affiliated Investment Accounts (for example, a company in which a Fund invests may retain a company in which an Affiliated Investment
Account invests to provide services or may acquire an asset from such company or vice versa). Certain of these agreements, transactions
and arrangements involve fees, servicing payments, rebates and/or other benefits to Morgan Stanley or its affiliates. For example,
portfolio entities may, including at the encouragement of Morgan Stanley, enter into agreements regarding group procurement and/or
vendor discounts. Morgan Stanley and its affiliates may also participate in these agreements and may realize better pricing or
discounts as a result of the participation of portfolio entities. To the extent permitted by applicable law, certain of these agreements
may provide for commissions or similar payments and/or discounts or rebates to be paid to a portfolio entity of an Affiliated Investment
Account, and such payments or discounts or rebates may also be made directly to Morgan Stanley or its affiliates. Under these arrangements,
a particular portfolio company or other entity may benefit to a greater degree than the other participants, and the funds, investment
vehicles and accounts (which may or may not include a Fund) that own an interest in such entity will receive a greater relative
benefit from the arrangements than the Eaton Vance funds, investment vehicles or accounts that do not own an interest therein.
Fees and compensation received by portfolio companies of Affiliated Investment Accounts in relation to the foregoing will not be
shared with a Fund or offset advisory fees payable.
Investments in Portfolio
Investments of Other Funds. To the extent permitted by applicable law, when a Fund invests in certain companies or other
entities, other funds affiliated with the investment adviser may have made or may be making an investment in such companies or
other entities. Other funds that have been or may be managed by the investment adviser may invest in the companies or other entities
in which a Fund has made an investment. Under such circumstances, a Fund and such other funds may have conflicts of interest (e.g.,
over the terms, exit strategies and related matters, including the exercise of remedies of their respective investments). If the
interests held by a Fund are different from (or take priority over) those held by such other funds, the investment adviser may
be required to make a selection at the time of conflicts between the interests held by such other funds and the interests held
by a Fund.
Allocation of Expenses.
Expenses may be incurred that are attributable to a Fund and one or more other Affiliated Investment Accounts (including in connection
with issuers in which a Fund and such other Affiliated Investment Accounts have overlapping investments). The allocation of such
expenses among such entities raises potential conflicts of interest. The investment adviser and its affiliates intend to allocate
such common expenses among a Fund and any such other Affiliated Investment Accounts on a pro rata basis or in such other manner
as the investment adviser deems to be fair and equitable or in such other manner as may be required by applicable law.
Temporary Investments.
To more efficiently invest short-term cash balances held by a Fund, the investment adviser may invest such balances on an
overnight “sweep” basis in shares of one or more money market funds or other short-term vehicles. It is anticipated
that the investment adviser to these money market funds or other short-term vehicles may be the investment adviser (or an affiliate)
to the extent permitted by applicable law, including Rule 12d1-1 under the 1940 Act. The Funds may invest in Eaton Vance Cash Reserves
Fund, LLC (Cash Reserves Fund), an affiliated investment company managed by Eaton Vance, for this purpose. Eaton Vance does not
currently receive a fee for advisory services provided to Cash Reserves Fund.
Transactions with
Affiliates. The investment adviser and any investment sub-adviser might purchase securities from underwriters or placement
agents in which a Morgan Stanley affiliate is a member of a syndicate or selling group, as a result of which an affiliate might
benefit from the purchase through receipt of a fee or otherwise. Neither the investment adviser nor any investment sub-adviser
will purchase securities on behalf of a Fund from an affiliate that is acting as a manager of a syndicate or selling group. Purchases
by the investment adviser on behalf of a Fund from an affiliate acting as a placement agent must meet the requirements of applicable
law. Furthermore, Morgan Stanley may face conflicts of interest when the Funds use service providers affiliated with Morgan Stanley
because Morgan Stanley receives greater overall fees when they are used.
General Process for
Potential Conflicts. All of the transactions described above involve the potential for conflicts of interest between the
investment adviser, related persons of the investment adviser and/or their clients. The Advisers Act, the 1940 Act and ERISA impose
certain requirements designed to decrease the possibility of conflicts of interest between an investment adviser and its clients.
In some cases, transactions may be permitted subject to fulfillment of certain conditions. Certain other transactions may be prohibited.
In addition, the investment adviser has instituted policies and procedures designed to prevent conflicts of interest from arising
and, when they do arise, to ensure that it effects transactions for clients in a manner that is consistent with its fiduciary duty
to its clients and in accordance with applicable law. The investment adviser seeks to ensure that potential or actual conflicts
of interest are appropriately resolved taking into consideration the overriding best interests of the client.
PARAMETRIC TABS 1-TO-10 YEAR LADDERED MUNICIPAL BOND FUND
PARAMETRIC TABS 5-TO-15 YEAR LADDERED MUNICIPAL BOND FUND
PARAMETRIC TABS 10-TO-20 YEAR LADDERED MUNICIPAL BOND
FUND
PARAMETRIC TABS INTERMEDIATE-TERM MUNICIPAL BOND FUND
PARAMETRIC TABS SHORT-TERM MUNICIPAL BOND FUND
EATON VANCE TABS 5-TO-15 YEAR LADDERED MUNICIPAL BOND
NEXTSHARES
Supplement to Prospectuses
dated June 1, 2020
1. The following replaces corresponding
disclosure under “Management.” in “Management and Organization”:
Each Fund’s investment adviser is Eaton Vance Management (“Eaton
Vance”) and, if applicable, the Portfolio’s investment adviser is Boston Management and Research (“BMR”).
Each of Eaton Vance and BMR have offices at Two International Place, Boston, MA 02110. Eaton Vance and BMR and their predecessor
organizations have been managing assets since 1924 and managing mutual funds since 1931. Prior to March 1, 2021, Eaton Vance was
a wholly owned subsidiary and BMR was an indirect wholly owned subsidiary of Eaton Vance Corp. (“EVC”).
On March 1, 2021, Morgan Stanley acquired EVC (the “Transaction”)
and Eaton Vance and BMR became indirect, wholly-owned subsidiaries of Morgan Stanley. In connection with the Transaction,
each Fund and the Portfolio entered into a new investment advisory agreement with its adviser and each Fund’s and the Portfolio’s
adviser entered into a new investment sub-advisory agreement with Parametric (as defined below), as applicable. Each such agreement
was approved by Fund shareholders or Portfolio interest holders, as applicable, prior to the consummation of the Transaction and
was effective upon its closing.
Morgan Stanley (NYSE: MS), whose principal offices are at 1585 Broadway,
New York, New York 10036, is a preeminent global financial services firm engaged in securities trading and brokerage activities,
as well as providing investment banking, research and analysis, financing and financial advisory services. As of December
31, 2020, after giving effect to the Transaction as described above, Morgan Stanley’s asset management operations had aggregate
assets under management of approximately $1.4 trillion.
Each Fund is allocated its pro rata share of the advisory fee paid by
the Portfolio in which it invests, as applicable. Effective March 1, 2021, any fee reduction agreement previously applicable to
a Fund or Portfolio, as applicable, was incorporated into its new investment advisory agreement with its investment adviser and/or
its new investment sub-advisory agreement with Parametric, as applicable.
Pursuant to investment sub-advisory agreements, each Fund’s and
each Portfolio’s adviser has delegated the investment management of the Fund or Portfolio to Parametric Portfolio Associates
LLC (“Parametric”). Parametric’s principal offices are at 800 Fifth Avenue, Suite 2800, Seattle, WA 98104. Each
Fund’s and each Portfolio’s adviser pays Parametric a portion of the advisory fee for sub-advisory services provided
to the Fund or Portfolio. On March 1, 2021, upon the closing of the Transaction, Parametric became an indirect, wholly-owned subsidiary
of Morgan Stanley. Prior to March 1, 2021, Parametric was an indirect, wholly-owned subsidiary of EVC.
2. The following replaces the
first paragraph under “Payments to Financial Intermediaries.” in “Purchasing Shares” for all Funds except
Eaton Vance TABS 5-to-15 Year Laddered Municipal Bond NextShares:
Payments to Financial
Intermediaries. In addition to payments disclosed under “Sales Charges” below, the principal underwriter, out
of its own resources, may make cash payments to certain financial intermediaries (which may include affiliates of the principal
underwriter and investment adviser) who provide marketing support, transaction processing and/or administrative services and, in
some cases, include some or all Eaton Vance funds in preferred or specialized selling programs. Payments made by the principal
underwriter to a financial intermediary may be significant and are typically in the form of fees based on Fund sales, assets, transactions
processed and/or accounts attributable to that financial intermediary. Financial intermediaries also may receive amounts from the
principal underwriter in connection with educational or due diligence meetings that include information concerning Eaton Vance
funds. The principal underwriter may pay or allow other promotional incentives or payments to financial intermediaries to the extent
permitted by applicable laws and regulations.
3. The following replaces the
fourth paragraph under “Distribution” for Eaton Vance TABS 5-to-15 Year Laddered Municipal Bond NextShares:
The investment adviser (or one of its affiliates) may make payments to
financial intermediaries (which may include affiliates of the investment adviser) related to marketing activities and presentations,
educational training programs, conferences, the development of technology platforms and reporting systems, or for making shares
of the Fund available to their customers. Such payments, which may be significant to the financial intermediary, are not made
by the Fund. Rather, such payments are made by the investment adviser (or one of its affiliates) from its own resources. A financial
intermediary may make
decisions about which investment options it recommends or makes available,
or the level of services provided, to its customers based on the payments it is eligible to receive. Therefore, such payments to
a financial intermediary create conflicts of interest between such intermediary and its customers and may cause the intermediary
to recommend the Fund over another investment.
4. The following replaces “Fund
Purchases through Edward D. Jones & Co., L.P. (“Edward Jones”)” under “Appendix A – Financial
Intermediary Sales Charge Variations” for all Funds except Eaton Vance TABS 5-to-15 Year Laddered Municipal Bond NextShares:
Policies Regarding Transactions Through Edward
D. Jones & Co., L.P. (“Edward Jones”)
The following information has been provided by Edward Jones:
Effective on or after March 1, 2021, the following information supersedes
prior information with respect to transactions and positions held in fund shares through an Edward Jones system. Clients of Edward
Jones (also referred to as “shareholders”) purchasing fund shares on the Edward Jones commission and fee-based platforms
are eligible only for the following sales charge discounts (also referred to as “breakpoints”) and waivers, which can
differ from discounts and waivers described elsewhere in the mutual fund prospectus or statement of additional information (“SAI”)
or through another broker-dealer. In all instances, it is the shareholder's responsibility to inform Edward Jones at the time of
purchase of any relationship, holdings of fund family or other facts qualifying the purchaser for discounts or waivers. Edward
Jones can ask for documentation from the shareholder of such circumstance. Shareholders should contact Edward Jones if they have
questions regarding their eligibility for these discounts and waivers.
Breakpoints
|
·
|
Breakpoint pricing, otherwise known as volume pricing, at dollar thresholds as described in the prospectus.
|
Rights of Accumulation (“ROA”)
|
·
|
The applicable sales charge on a purchase of Class A shares is determined by taking into account all share classes (except
certain money market funds and any assets held in group retirement plans) of the mutual fund family held by the shareholder or
in an account grouped by Edward Jones with other accounts for the purpose of providing certain pricing considerations (“pricing
groups”). If grouping assets as a shareholder, this includes all share classes held on the Edward Jones platform and/or held
on another platform. The inclusion of eligible fund family assets in the ROA calculation is dependent on the shareholder notifying
Edward Jones of such assets at the time of calculation. Money market funds are included only if such shares were sold with a sales
charge at the time of purchase or acquired in exchange for shares purchased with a sales charge.
|
|
·
|
The employer maintaining a SEP IRA plan and/or SIMPLE IRA plan may elect to establish or change ROA for the IRA accounts associated
with the plan to a plan-level grouping as opposed to including all share classes at a shareholder or pricing group level.
|
|
·
|
ROA is determined by calculating the higher of cost minus redemptions or market value (current shares x NAV).
|
Letter of Intent (“LOI”)
|
·
|
Through a LOI, shareholders can receive the sales charge and breakpoint discounts for purchases shareholders intend to make
over a 13-month period from the date Edward Jones receives the LOI. The LOI is determined by calculating the higher of cost or
market value of qualifying holdings at LOI initiation in combination with the value that the shareholder intends to buy over a
13-month period to calculate the front-end sales charge and any breakpoint discounts. Each purchase the shareholder makes during
that 13-month period will receive the sales charge and breakpoint discount that applies to the total amount. If during the 13-month
period the shareholder redeems any of the shares purchased pursuant to a LOI, the value of the redeemed shares will not be included
for purposes of satisfying the LOI. The inclusion of eligible fund family assets in the LOI calculation is dependent on the shareholder
notifying Edward Jones of such assets at the time of calculation. Purchases made before the LOI is received by Edward Jones are
not adjusted under the LOI and will not reduce the sales charge previously paid. Sales charges will be adjusted if LOI is not met.
|
|
·
|
If the employer maintaining a SEP IRA plan and/or SIMPLE IRA plan has elected to establish or change ROA for the IRA accounts
associated with the plan to a plan-level grouping, LOIs will also be at the plan-level and may only be established by the employer.
|
Front-end Sales Charge Waivers
Sales charges are waived for the following shareholders and
in the following situations:
|
·
|
Associates of Edward Jones and its affiliates and their family members who are in the same pricing group (as determined by
Edward Jones under its policies and procedures) as the associate. This waiver will continue for the remainder of the associate's
life if the associate retires from Edward Jones in good-standing and remains in good standing pursuant to Edward Jones' policies
and procedures.
|
|
·
|
Shares purchased in an Edward Jones fee-based program.
|
|
·
|
Shares purchased through reinvestment of capital gains distributions and dividend reinvestment.
|
|
·
|
Shares purchased from the proceeds of redeemed shares of the same fund family so long as the following conditions are met:
1) the proceeds are from the sale of shares within 60 days of the purchase, and 2) the sale and purchase are made in the same share
class and the same account or the purchase is made in an individual retirement account with proceeds from liquidations in a non-retirement
account.
|
|
·
|
Shares exchanged into Class A shares from another share class so long as the exchange is into the same fund and was initiated
at the discretion of Edward Jones. Edward Jones is responsible for any remaining Contingent Deferred Sales Charge (“CDSC”)
due to the fund company or its affiliate, if applicable. Any future purchases are subject to the applicable sales charge as disclosed
in the prospectus.
|
|
·
|
Exchanges from Class C shares to Class A shares of the same fund, generally, in the 84th month following the anniversary of
the purchase date or earlier at the discretion of Edward Jones.
|
CDSC Waivers
If the shareholder purchases shares that are subject to a CDSC
and those shares are redeemed before the CDSC is expired, the shareholder is responsible to pay the CDSC except in the following
conditions:
|
·
|
The death or disability of the shareholder.
|
|
·
|
Systematic withdrawals with up to 10% per year of the account value.
|
|
·
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Return of excess contributions from an Individual Retirement Account (IRA).
|
|
·
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Shares sold as part of a required minimum distribution for IRA and retirement accounts if the redemption is taken in or after
the year the shareholder reaches qualified age based on applicable IRS regulations.
|
|
·
|
Shares sold to pay Edward Jones fees or costs in such cases where the transaction is initiated by Edward Jones. Edward Jones
is responsible for any remaining CDSC due to the fund company or its affiliate, if applicable.
|
|
·
|
Shares exchanged in an Edward Jones fee-based program. Edward Jones is responsible for any remaining CDSC due to the fund company
or its affiliate, if applicable.
|
|
·
|
Shares acquired through NAV reinstatement.
|
|
·
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Shares redeemed at the discretion of Edward Jones for Minimum Balances as described below.
|
******************************************************************************
Other Important Information Regarding Transactions Through Edward Jones
Minimum Purchase Amounts
|
·
|
Initial purchase minimum: $250
|
|
·
|
Subsequent purchase minimum: none
|
Minimum Balances
|
·
|
Edward Jones has the right to redeem at its discretion fund holdings with a balance of $250 or less. The following are examples
of accounts that are not included in this policy:
|
|
·
|
A fee-based account held on an Edward Jones platform
|
|
·
|
A 529 account held on an Edward Jones platform
|
|
·
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An account with an active systematic investment plan or LOI
|
Exchanging Share Classes
At any time it deems necessary, Edward Jones has the authority to exchange
at NAV a shareholder's holdings in a fund to Class A shares of the same fund. Edward Jones is responsible for any remaining CDSC
due to the fund company or its affiliate, if applicable. Any future purchases are subject to the applicable sales charge as disclosed
in the prospectus.
March 1, 2021
|
37967 3.1.21
|
PARAMETRIC TABS 1-TO-10 YEAR LADDERED MUNICIPAL BOND FUND
PARAMETRIC TABS 5-TO-15 YEAR LADDERED MUNICIPAL BOND FUND
PARAMETRIC TABS 10-TO-20 YEAR LADDERED MUNICIPAL BOND
FUND
PARAMETRIC TABS INTERMEDIATE-TERM MUNICIPAL BOND FUND
PARAMETRIC TABS SHORT-TERM MUNICIPAL BOND FUND
EATON VANCE TABS 5-TO-15 YEAR LADDERED MUNICIPAL BOND
NEXTSHARES
Supplement to Statements
of Additional Information dated June 1, 2020
1. The following replaces the
first paragraph under “Fund Management.” in “Management and Organization”:
Fund Management.
The Trustees of the Trust are responsible for the overall management and supervision of the affairs
of the Trust. If applicable, the Trustees of the Portfolio are responsible for the overall management and supervision of the Portfolio.
The Board members and officers of the Trust and the Portfolio are listed below. Except as indicated, each individual has held the
office shown or other offices in the same company for the last five years. Board members hold indefinite terms of office. Each
Trustee holds office until his or her successor is elected and qualified, subject to a prior death, resignation, retirement, disqualification
or removal. Under the terms of each Funds’ and Portfolio’s, if applicable, current Trustee retirement policy,
an Independent Trustee must retire and resign as a Trustee on the earlier of: (i) the first day of July following his or her 74th
birthday; or (ii), with limited exception, December 31st of the 20th year in which he or she has served as a Trustee. However,
if such retirement and resignation would cause each Fund or Portfolio to be out of compliance with Section 16 of the 1940
Act or any other regulations or guidance of the SEC, then such retirement and resignation will not become effective until such
time as action has been taken for each Fund or Portfolio to be in compliance therewith. The “noninterested Trustees”
consist of those Trustees who are not “interested persons” of the Trust and the Portfolio, as that term is defined
under the 1940 Act. The business address of each Board member and officer is Two International Place, Boston, Massachusetts 02110.
As used in this SAI, “EVC” refers to Eaton Vance Corp., “EV” refers to Eaton Vance, Inc., “Eaton
Vance” refers to Eaton Vance Management and “EVD” refers to Eaton Vance Distributors, Inc. (see “Principal
Underwriter” under “Other Service Providers”). EV is the trustee of each of Eaton Vance and BMR. Effective March
1, 2021, each of Eaton Vance, BMR and EV are indirect wholly-owned subsidiaries of Morgan Stanley. Each officer affiliated with
Eaton Vance may hold a position with other Eaton Vance affiliates that is comparable to his or her position with Eaton Vance listed
below.
2. The following replaces the
Thomas E. Faust Jr. row in the Trustees table and in his biographical narrative in “Management and Organization”:
THOMAS E. FAUST JR.
1958
|
|
Trustee
|
|
Since 2007
|
|
Chairman of Morgan Stanley Investment Management, Inc. (MSIM), Director and President of EV, Chief Executive Officer and President of Eaton Vance and BMR, and Director of EVD. Formerly, Chairman, Chief Executive Officer and President of EVC. Trustee and/or officer of 141 registered investment companies. Mr. Faust is an interested person because of his positions with MSIM, BMR, Eaton Vance, EVD and EV, which are affiliates of the Trust and Portfolio, and his former position with EVC, which was an affiliate of the Trust and Portfolio prior to March 1, 2021.
|
|
141
|
|
Formerly, Director of EVC (2007-2021) and Hexavest Inc. (2012-2021) (investment management firm).
|
Thomas E. Faust
Jr. Mr. Faust has served as a member of the Eaton Vance Fund Boards since 2007. Effective March 1, 2021, he is Chairman
of MSIM. He is also Director and President of EV, Chief Executive Officer and President of Eaton Vance and BMR, and Director of
EVD. Mr. Faust previously served as Chairman and Chief Executive Officer of EVC from 2007 through March 1, 2021 and as President
of EVC from 2006 through March 1, 2021. Mr. Faust served as a Director of Hexavest Inc. from 2012-2021. From 2016 through 2019,
Mr. Faust served as a Director of SigFig Wealth Management LLC. Mr. Faust previously served as an equity analyst, portfolio manager,
Director of Equity Research and Management and Chief Investment Officer of Eaton Vance from 1985-2007. He holds B.S. degrees in
Mechanical Engineering and Economics from the Massachusetts Institute of Technology and an MBA from Harvard Business School. Mr.
Faust has been a Chartered Financial Analyst since 1988. He is a trustee and member of the executive committee of the Boston Symphony
Orchestra, Inc. and trustee emeritus of Wellesley College.
3. The following is added as
the first paragraph under “Investment Advisory and Administrative Services” in “Investment Advisory and Administrative
Services”:
As described in the Prospectus, upon the closing of the transaction by
which Morgan Stanley acquired EVC (the “Transaction”), each Fund and Portfolio entered into a new investment advisory
agreement or investment advisory and administrative agreement with Eaton Vance or BMR, as applicable, and Eaton Vance or BMR entered
into a new investment sub-advisory agreement with the Parametric, as applicable.
4. The following replaces the
last paragraph under “Investment Advisory and Administrative Services.” in “Investment Advisory and Administrative
Services”:
Each Investment Advisory and Administrative Agreement and Investment Sub-Advisory
Agreement with the investment adviser or sub-adviser continues in effect through and including the second anniversary of its execution
and shall continue in full force and effect indefinitely thereafter, but only so long as such continuance after such second anniversary
is specifically approved at least annually (i) by the vote of a majority of the noninterested Trustees of the Trust, in the case
of a Fund, or a Portfolio, if applicable, cast in person at a meeting specifically called for the purpose of voting on such approval
and (ii) by the Board of the Trust, in the case of a Fund, or a Portfolio, if applicable, or by vote of a majority of the outstanding
voting securities of the Portfolio or Fund. Each Agreement may be terminated at any time without penalty on sixty (60) days’
written notice by either party, or by vote of the majority of the outstanding voting securities of the Portfolio or Fund, and each
Agreement will terminate automatically in the event of its assignment. Each Agreement provides that the investment adviser
may render services to others. Each Agreement also provides that the investment adviser shall not be liable for any loss incurred
in connection with the performance of its duties, or action taken or omitted under the Agreement, in the absence of willful misfeasance,
bad faith, gross negligence or reckless disregard of its obligations and duties thereunder, or for any losses sustained in the
acquisition, holding or disposition of any security or other investment. Each Agreement is not intended to, and does not, confer
upon any person not a party to it any right, benefit or remedy of any nature, except that the new sub-advisory agreements with
Parametric (as described above) state that each Fund is a third party beneficiary of such agreement.
5. The following replaces “Information
About BMR and Eaton Vance.” in “Investment Advisory and Administrative Services”:
Information About
BMR and Eaton Vance. BMR and Eaton Vance are business trusts organized under the laws of the Commonwealth of Massachusetts.
EV serves as trustee of BMR and Eaton Vance. As described in the Prospectus, following the closing of the Transaction on March
1, 2021, EV, Eaton Vance and BMR became indirect wholly-owned subsidiaries of Morgan Stanley (NYSE: MS), a preeminent global financial
services firm engaged in securities trading and brokerage activities, as well as providing investment banking, research and analysis,
financing and financial advisory services.
Prior to March 1, 2021, EV and Eaton Vance were wholly-owned subsidiaries
of EVC, a Maryland corporation and publicly-held holding company and BMR was an indirect wholly owned subsidiary of EVC. EVC through
its subsidiaries and affiliates engaged primarily in investment management, administration and marketing activities. The Directors
of EVC were Thomas E. Faust Jr., Ann E. Berman, Leo I. Higdon, Jr., Paula A. Johnson, Brian D. Langstraat, Dorothy E. Puhy, Winthrop
H. Smith, Jr. and Richard A. Spillane, Jr. All shares of the outstanding Voting Common Stock of EVC were deposited in a Voting
Trust, the Voting Trustees of which were Mr. Faust, Paul W. Bouchey, Craig R. Brandon, Daniel C. Cataldo, Michael A. Cirami, Cynthia
J. Clemson, James H. Evans, Maureen A. Gemma, Laurie G. Hylton, Mr. Langstraat, Thomas Lee, Frederick S. Marius, David C. McCabe,
Edward J. Perkin, Lewis R. Piantedosi, Charles B. Reed, Craig P. Russ, Thomas C. Seto, John L. Shea, Eric A. Stein, John H. Streur,
Andrew N. Sveen, Payson F. Swaffield, R. Kelly Williams and Matthew J. Witkos (all of whom are or were officers of Eaton Vance
or its affiliates). The Voting Trustees had unrestricted voting rights for the election of Directors of EVC. Prior to March 1,
2021, all of the outstanding voting trust receipts issued under said Voting Trust were owned by certain of the officers of BMR
and Eaton Vance who may also have been officers, or officers and Directors of EVC and EV. As indicated under “Management
and Organization,” all of the officers of the Trust (as well as Mr. Faust who is also a Trustee) are employees of Eaton Vance
and/or BMR.
6. The following replaces “Information
About Parametric.” in “Investment Advisory and Administrative Services”:
Information About
Parametric. Parametric is an investment manager that has been providing investment advisory services since its formation
in 1987. Headquartered in Seattle, Parametric has offices in Minneapolis, New York City, Boston and Westport, Connecticut. As described
in the Prospectus, following the closing of the Transaction on March 1, 2021, Parametric became an indirect wholly-owned subsidiary
of Morgan Stanley. Prior to March 1, 2021, Parametric was a wholly owned subsidiary of EVC.
7. The following replaces “Compensation
Structure for Parametric’s New York and Massachusetts-based Portfolio Managers” and “Method to Determine Compensation
for Parametric’s New York and Massachusetts-based Portfolio Managers.” under “Portfolio Managers.” in “Investment
Advisory and Administrative Services”:
Compensation Structure
for Parametric’s New York and Massachusetts-based Portfolio Managers. Compensation of Parametric’s portfolio
managers and other investment professionals has the following primary components: (1) a base salary, (2) an annual cash bonus,
and (3) annual non-cash compensation consisting of restricted shares of Morgan Stanley stock that are subject to a fixed vesting
and distribution schedule. Parametric’s investment professionals also receive certain retirement, insurance and other benefits
that are broadly available to Parametric’s employees. Compensation of Parametric’s investment professionals is reviewed
primarily on an annual basis. Cash bonuses, stock-based compensation awards, and adjustments in base salary are typically paid or put into effect at or
shortly after the December 31st fiscal year end of Morgan Stanley.
Method to Determine
Compensation for Parametric’s New York and Massachusetts-based Portfolio Managers. Parametric compensates its
portfolio managers based primarily on the scale and complexity of their portfolio responsibilities and the total return performance
of managed funds and accounts versus the benchmark(s) stated in the prospectus, as well as an appropriate peer group (as described
below). In addition to rankings within peer groups of funds on the basis of absolute performance, consideration may also be given
to relative risk-adjusted performance. Risk-adjusted performance measures include, but are not limited to, Sharpe ratio, which
uses standard deviation and excess return to determine reward per unit of risk. Performance is normally based on periods ending
on the September 30th preceding fiscal year end. Fund performance is normally evaluated primarily versus peer groups of funds as
determined by Morningstar, Inc. When a fund’s peer group as determined by Morningstar is deemed by Parametric’s management
not to provide a fair comparison, performance may instead be evaluated primarily against a custom peer group or market index. In
evaluating the performance of a fund and its manager, primary emphasis is normally placed on three-year performance, with secondary
consideration of performance over longer and shorter periods. For funds that are tax-managed or otherwise have an objective of
after-tax returns, performance is measured net of taxes. For other funds, performance is evaluated on a pre-tax basis. For funds
with an investment objective other than total return (such as current income), consideration will also be given to the fund’s
success in achieving its objective. For managers responsible for multiple funds and accounts, investment performance is evaluated
on an aggregate basis, based on averages or weighted averages among managed funds and accounts. Funds and accounts that have performance-based
advisory fees are not accorded disproportionate weightings in measuring aggregate portfolio manager performance.
The compensation of portfolio managers with other job responsibilities
(such as heading an investment group or providing analytical support to other portfolios) will include consideration of the scope
of such responsibilities and the managers’ performance in meeting them.
Parametric seeks to compensate portfolio managers commensurate with their
responsibilities and performance, and competitive with other firms within the investment management industry. Parametric participates
in investment-industry compensation surveys and utilizes survey data as a factor in determining salary, bonus and stock-based compensation
levels for portfolio managers and other investment professionals. Salaries, bonuses and stock-based compensation are also influenced
by the operating performance of Parametric and Morgan Stanley. The overall annual cash bonus pool is generally based on a substantially
fixed percentage of pre-bonus adjusted operating income. While the salaries of Parametric’s portfolio managers are comparatively
fixed, cash bonuses and stock-based compensation may fluctuate significantly from year to year, based on changes in manager performance
and other factors as described herein. For a high performing portfolio manager, cash bonuses and stock-based compensation may represent
a substantial portion of total compensation.
8. The following replaces the
first two paragraphs in “Other Service Providers” for each Fund except Eaton Vance TABS 5-to-15 Year Laddered Municipal
Bond NextShares:
Principal Underwriter.
Eaton Vance Distributors, Inc. (“EVD”), Two International Place, Boston, MA 02110 is
the principal underwriter of each Fund. The principal underwriter acts as principal in selling shares under a Distribution Agreement
with the Trust. The expenses of printing copies of prospectuses used to offer shares and other selling literature and of advertising
are borne by the principal underwriter. The fees and expenses of qualifying and registering and maintaining qualifications and
registrations of a Fund and its shares under federal and state securities laws are borne by the Fund. The Distribution Agreement
is renewable annually by the members of the Board (including a majority of the noninterested Trustees who have no direct or indirect
financial interest in the operation of the Distribution Agreement or any applicable Distribution Plan), may be terminated on sixty
days’ notice either by such Trustees or by vote of a majority of the outstanding Fund shares or on six months’ notice
by the principal underwriter and is automatically terminated upon assignment. The principal underwriter distributes shares on a
“best efforts” basis under which it is required to take and pay for only such shares as may be sold. Effective March
1, 2021, EVD is an indirect wholly-owned subsidiary of Morgan Stanley. Prior to March 1, 2021, EVD was a direct, wholly-owned subsidiary
of EVC. Mr. Faust is also a Director of EVD. EVD also serves as placement agent for the Portfolio, if applicable.
Custodian.
State Street Bank and Trust Company (“State Street”), State Street Financial Center,
One Lincoln Street, Boston, MA 02111, serves as custodian to each Fund and Portfolio, if applicable. State Street has custody of
all cash and securities representing a Fund’s interest in the Portfolio, has custody of the Portfolio’s and each
Fund's assets, maintains the general ledger of the Portfolio and each Fund and computes the daily net asset value of interests
in the Portfolio and the net asset value of shares of each Fund. In such capacity it attends to details in connection with the
sale, exchange, substitution, transfer or other dealings with each Fund's and the Portfolio’s investments, receives and disburses
all funds and performs various other ministerial duties upon receipt of proper instructions from the Trust and the Portfolio. State
Street also provides services in connection with the preparation of shareholder reports and the electronic filing of such reports
with the SEC.
9. The following replaces the
second paragraph in “Other Service Providers” for Eaton Vance TABS 5-to-15 Year Laddered Municipal Bond NextShares:
Custodian.
State Street Bank and Trust Company (“State Street”), State Street Financial Center, One Lincoln Street, Boston, MA
02111, serves as custodian to each Fund and Portfolio, if applicable. State Street has custody of all cash and securities representing
a Fund’s interest in the Portfolio, has custody of the Portfolio’s and each Fund's assets, maintains the general
ledger of the Portfolio and each Fund and computes the daily net asset value of interests in the Portfolio and the net asset value
of shares of each Fund. In such capacity it attends to details in connection with the sale, exchange, substitution, transfer or
other dealings with each Fund's and the Portfolio’s investments, receives and disburses all funds and performs various other
ministerial duties upon receipt of proper instructions from the Trust and the Portfolio. State Street also provides services in
connection with the preparation of shareholder reports and the electronic filing of such reports with the SEC.
10. The following replaces the
corresponding disclosure in “Portfolio Securities Transactions”:
Decisions concerning the execution of portfolio security transactions,
including the selection of the market and the broker-dealer firm or other financial intermediary (each an “intermediary”),
are made by the investment adviser. Each Fund and each Portfolio is responsible for the expenses associated with its portfolio
transactions. The investment adviser is also responsible for the execution of transactions for all other accounts managed by it.
The investment adviser places the portfolio security transactions for execution with one or more intermediaries firms. The investment
adviser uses its best efforts to obtain execution of portfolio security transactions at prices that, in the investment adviser’s
judgment, are advantageous to the client and at a reasonably competitive spread or (when a disclosed commission is being charged)
at reasonably competitive commission rates. In seeking such execution, the investment adviser will use its best judgment in evaluating
the terms of a transaction, and will give consideration to various relevant factors, which may include, without limitation, the
full range and quality of the intermediary’s services, responsiveness of the intermediary to the investment adviser, the
size and type of the transaction, the nature and character of the market for the security, the confidentiality, speed and certainty
of effective execution required for the transaction, the general execution and operational capabilities of the intermediary, the
reputation, reliability, experience and financial condition of the intermediary, the value and quality of the services rendered
by the intermediary in this and other transactions, and the amount of the spread or commission, if any. In addition, the investment
adviser may consider the receipt of Research Services (as defined below), provided it does not compromise the investment adviser’s
obligation to seek best overall execution for a Fund or Portfolio and is otherwise in compliance with applicable law. The investment
adviser may engage in portfolio transactions with an intermediary that sells shares of Eaton Vance funds, provided such transactions
are not directed to that intermediary as compensation for the promotion or sale of such shares.
As described in the Prospectus, following the closing of the Transaction
on March 1, 2021, the investment adviser became an “affiliated person,” as defined in the 1940 Act, of Morgan Stanley
and its affiliates, including certain intermediaries (as previously defined). As a result, the investment adviser is subject to
certain restrictions regarding transactions with Morgan Stanley-affiliated intermediaries, as set forth in the 1940 Act. Under
certain circumstances, such restrictions may limit the investment adviser’s ability to place portfolio transactions on behalf
of a Fund or Portfolio at the desired time or price. Any transaction the investment adviser enters into with a Morgan Stanley-affiliated
intermediary on behalf of a Fund or Portfolio will be done in compliance with applicable laws, rules, and regulations; will be
subject to any restrictions contained in a Fund’s or Portfolio’s investment advisory agreement; will be subject to
the investment adviser’s duty to seek best execution; and, will comply with any applicable policies and procedures of the
investment adviser, as described below.
Subject to the overriding objective of obtaining the best execution of
orders and applicable rules and regulations, as described above, a Fund or Portfolio may use an affiliated intermediary, including
a Morgan Stanley-affiliated intermediary, to effect Fund or Portfolio portfolio transactions, including transactions in futures
contracts and options on futures contracts, under procedures adopted by the Board. In order to use such affiliated intermediaries,
the Fund’s or Portfolio’s Board must approve and periodically review procedures reasonably designed to ensure that
commission rates and other remuneration paid to the affiliated intermediaries are fair and reasonable in comparison to those of
other intermediaries for comparable transactions involving similar securities being purchased or sold during a comparable time
period.
Pursuant to an order issued by the SEC, a Fund or Portfolio is permitted
to engage in principal transactions in money market instruments, subject to certain conditions, with Morgan Stanley & Co. LLC,
a broker-dealer affiliated with Morgan Stanley.
Municipal obligations, including state obligations, purchased and sold by
each Fund or Portfolio are generally traded in the over-the-counter market on a net basis (i.e., without commission) through intermediaries
acting for their own account rather than as brokers, or otherwise involve transactions directly with the issuer of such obligations.
Such intermediaries attempt to profit from such transactions by buying at the bid price and selling at the higher asked price of
the market for such obligations, and the difference between the bid and asked price is customarily referred to as the spread. Each
Fund or Portfolio may also purchase municipal obligations from underwriters, and dealers in fixed-price offerings, the cost of
which may include undisclosed fees and concessions to the underwriters. On occasion it may be necessary or appropriate to purchase
or sell a security through a broker on an agency basis, in which case the Fund or Portfolio will incur a brokerage
commission. Although spreads or commissions on portfolio security transactions
will, in the judgment of the investment adviser, be reasonable in relation to the value of the services provided, spreads or commissions
exceeding those which another firm might charge may be paid to intermediaries who were selected to execute transactions on behalf
of each Fund or Portfolio and the investment adviser’s other clients for providing brokerage and research services to the
investment adviser as permitted by applicable law.
Research Services provided by (and produced by) broker-dealers that execute
portfolio transactions or from affiliates of executing broker-dealers are referred to as “Proprietary Research.” Except
for trades executed in jurisdictions where such consideration is not permissible, the investment adviser may and does consider
the receipt of Proprietary Research Services as a factor in selecting broker dealers to execute client portfolio transactions,
provided it does not compromise the investment adviser’s obligation to seek best overall execution. In jurisdictions where
permissible, the investment adviser also may consider the receipt of Research Services under so called “client commission
arrangements” or “commission sharing arrangements” (both referred to as “CCAs”) as a factor in selecting
broker dealers to execute transactions, provided it does not compromise the investment adviser’s obligation to seek best
overall execution. Under a CCA arrangement, the investment adviser may cause client accounts to effect transactions through a broker-dealer
and request that the broker-dealer allocate a portion of the commissions paid on those transactions to a pool of commission credits
that are paid to other firms that provide Research Services to the investment adviser. Under a CCA, the broker-dealer that provides
the Research Services need not execute the trade. Participating in CCAs may enable the investment adviser to consolidate payments
for research using accumulated client commission credits from transactions executed through a particular broker-dealer to periodically
pay for Research Services obtained from and provided by other firms, including other broker-dealers that supply Research Services.
The investment adviser believes that CCAs offer the potential to optimize the execution of trades and the acquisition of a variety
of high quality Research Services that the investment adviser might not be provided access to absent CCAs. The investment adviser
may enter into CCA arrangements with a number of broker-dealers and other firms, including certain affiliates of the investment
adviser. The investment adviser will only enter into and utilize CCAs to the extent permitted by Section 28(e) and other applicable
law.
The investment companies sponsored by the investment adviser or certain
of its affiliates also may allocate brokerage commissions to acquire information relating to the
performance, fees and expenses of such companies and other investment companies, which information is used by the members
of the Board of such companies to fulfill their responsibility to oversee the quality of the services provided to various entities,
including the investment adviser, to such companies. Such companies may also pay cash for such information.
Municipal obligations considered as
investments for each Fund and Portfolio, if applicable, may also be appropriate for other investment accounts managed by the
investment adviser or certain of its affiliates. Whenever decisions are made to buy or sell securities by each Fund or
Portfolio and one or more of such other accounts simultaneously, the investment adviser will allocate the security
transactions (including “new” issues) in a manner which it believes to be equitable under the circumstances. As a
result of such allocations, there may be instances where each Fund or Portfolio will not participate in a transaction that is
allocated among other accounts. If an aggregated order cannot be filled completely, allocations will generally be made on a
pro rata basis. An order may not be allocated on a pro rata basis where, for example: (i) consideration is given to portfolio
managers who have been instrumental in developing or negotiating a particular investment; (ii) consideration is given to an
account with specialized investment policies that coincide with the particulars of a specific investment; (iii) pro rata
allocation would result in odd-lot or de minimis amounts being allocated to a portfolio or other client; or (iv) where the
investment adviser reasonably determines that departure from a pro rata allocation is advisable. While these aggregation and
allocation policies could have a detrimental effect on the price or amount of the securities available to each Fund or Portfolio
from time to time, it is the opinion of the members of the Board that the benefits from the investment adviser organization
outweigh any disadvantage that may arise from exposure to simultaneous transactions.
11. The following is added as
a new section immediately prior to “Financial Statements”:
POTENTIAL CONFLICTS OF INTEREST
As a diversified global financial services firm, Morgan Stanley engages
in a broad spectrum of activities, including financial advisory services, investment management activities, lending, commercial
banking, sponsoring and managing private investment funds, engaging in broker-dealer transactions and principal securities, commodities
and foreign exchange transactions, research publication and other activities. In the ordinary course of its business, Morgan Stanley
is a full-service investment banking and financial services firm and therefore engages in activities where Morgan Stanley’s
interests or the interests of its clients may conflict with the interests of a Fund or Portfolio, if applicable, (collectively
for the purposes of this section, “Fund” or “Funds”). Morgan Stanley advises clients and sponsors, manages
or advises other investment funds and investment programs, accounts and businesses (collectively, together with the Funds, any
new or successor funds, programs, accounts or businesses, the ‘‘Affiliated Investment Accounts’’) with
a wide variety of investment objectives that in some instances may overlap or conflict with a Fund’s investment objectives
and present conflicts of interest. In addition, Morgan
Stanley may also from time to time create new or successor Affiliated
Investment Accounts that may compete with a Fund and present similar conflicts of interest. The discussion below enumerates certain
actual, apparent and potential conflicts of interest. There is no assurance that conflicts of interest will be resolved in favor
of Fund shareholders and, in fact, they may not be. Conflicts of interest not described below may also exist.
Material Non-public
and Other Information. It is expected that confidential or material non-public information regarding an investment or potential
investment opportunity may become available to the investment adviser. If such information becomes available, the investment adviser
may be precluded (including by applicable law or internal policies or procedures) from pursuing an investment or disposition opportunity
with respect to such investment or investment opportunity.
The investment adviser may also from time to time be subject to contractual
‘‘stand-still’’ obligations and/or confidentiality obligations that may restrict its ability to trade in
certain investments on a Fund’s behalf. In addition, the investment adviser may be precluded from disclosing such information
to an investment team, even in circumstances in which the information would be beneficial if disclosed. Therefore, the investment
team may not be provided access to material non-public information in the possession of Morgan Stanley that might be relevant to
an investment decision to be made on behalf of a Fund, and the investment team may initiate a transaction or sell an investment
that, if such information had been known to it, may not have been undertaken. In addition, certain members of the investment team
may be recused from certain investment-related discussions so that such members do not receive information that would limit their
ability to perform functions of their employment with the investment adviser or its affiliates unrelated to that of a Fund. Furthermore,
access to certain parts of Morgan Stanley may be subject to third party confidentiality obligations and to information barriers
established by Morgan Stanley in order to manage potential conflicts of interest and regulatory restrictions, including without
limitation joint transaction restrictions pursuant to the 1940 Act. Accordingly, the investment adviser’s ability to source
investments from other business units within Morgan Stanley may be limited and there can be no assurance that the investment adviser
will be able to source any investments from any one or more parts of the Morgan Stanley network.
The investment adviser may restrict its investment decisions and activities
on behalf of the Funds in various circumstances, including because of applicable regulatory requirements or information held by
the investment adviser or Morgan Stanley. The investment adviser might not engage in transactions or other activities for, or enforce
certain rights in favor of, a Fund due to Morgan Stanley’s activities outside the Funds. In instances where trading of an
investment is restricted, the investment adviser may not be able to purchase or sell such investment on behalf of a Fund, resulting
in the Fund’s inability to participate in certain desirable transactions. This inability to buy or sell an investment could
have an adverse effect on a Fund’s portfolio due to, among other things, changes in an investment’s value during the
period its trading is restricted. Also, in situations where the investment adviser is required to aggregate its positions with
those of other Morgan Stanley business units for position limit calculations, the investment adviser may have to refrain from making
investments due to the positions held by other Morgan Stanley business units or their clients. There may be other situations where
the investment adviser refrains from making an investment due to additional disclosure obligations, regulatory requirements, policies,
and reputational risk, or the investment adviser may limit purchases or sales of securities in respect of which Morgan Stanley
is engaged in an underwriting or other distribution capacity.
Morgan Stanley has established certain information barriers and other
policies to address the sharing of information between different businesses within Morgan Stanley. As a result of information barriers,
the investment adviser generally will not have access, or will have limited access, to certain information and personnel in other
areas of Morgan Stanley relating to business transactions for clients (including transactions in investing, banking, prime brokerage
and certain other areas), and generally will not manage the Funds with the benefit of the information held by such other areas.
Morgan Stanley, due to its access to and knowledge of funds, markets and securities based on its prime brokerage and other businesses,
may make decisions based on information or take (or refrain from taking) actions with respect to interests in investments of the
kind held (directly or indirectly) by the Funds in a manner that may be adverse to the Funds, and will not have any obligation
or other duty to share information with the investment adviser.
In limited circumstances, however, including for purposes of managing
business and reputational risk, and subject to policies and procedures, Morgan Stanley personnel, including personnel of the investment
adviser, on one side of an information barrier may have access to information and personnel on the other side of the information
barrier through “wall crossings.” The investment adviser faces conflicts of interest in determining whether to engage
in such wall crossings. Information obtained in connection with such wall crossings may limit or restrict the ability of the investment
adviser to engage in or otherwise effect transactions on behalf of the Funds (including purchasing or selling securities that the
investment adviser may otherwise have purchased or sold for a Fund in the absence of a wall crossing). In managing conflicts of
interest that arise because of the foregoing, the investment adviser generally will be subject to fiduciary requirements. The investment
adviser may also implement internal information barriers or ethical walls, and the conflicts described herein with respect to information
barriers and otherwise with respect to Morgan Stanley and the investment adviser will also apply internally within the investment
adviser. As a result, a Fund may not be permitted to transact in (e.g., dispose of a security in whole or in part)
during periods when it otherwise would have been able to do so, which
could adversely affect a Fund. Other investors in the security that are not subject to such restrictions may be able to transact
in the security during such periods. There may also be circumstances in which, as a result of information held by certain portfolio
management teams in the investment adviser, the investment adviser limits an activity or transaction for a Fund, including if the
Fund is managed by a portfolio management team other than the team holding such information.
Investments by Morgan
Stanley and its Affiliated Investment Accounts. In serving in multiple capacities to Affiliated Investment Accounts, Morgan
Stanley, including the investment adviser and its investment teams, may have obligations to other clients or investors in Affiliated
Investment Accounts, the fulfillment of which may not be in the best interests of a Fund or its shareholders. A Fund’s investment
objectives may overlap with the investment objectives of certain Affiliated Investment Accounts. As a result, the members of an
investment team may face conflicts in the allocation of suitable investment opportunities among a Fund and other investment funds,
programs, accounts and businesses advised by or affiliated with the investment adviser. Certain Affiliated Investment Accounts
may provide for higher management or incentive fees or greater expense reimbursements or overhead allocations, all of which may
contribute to this conflict of interest and create an incentive for the investment adviser to favor such other accounts.
Morgan Stanley currently invests and plans to continue to invest on its
own behalf and on behalf of its Affiliated Investment Accounts in a wide variety of investment opportunities globally. Morgan Stanley
and its Affiliated Investment Accounts, to the extent consistent with applicable law and policies and procedures, will be permitted
to invest in investment opportunities without making such opportunities available to a Fund beforehand. Subject to the foregoing,
Morgan Stanley may offer investments that fall into the investment objectives of an Affiliated Investment Account to such account
or make such investment on its own behalf, even though such investment also falls within a Fund’s investment objectives.
A Fund may invest in opportunities that Morgan Stanley and/or one or more Affiliated Investment Accounts has declined, and vice
versa. All of the foregoing may reduce the number of investment opportunities available to a Fund and may create conflicts of interest
in allocating investment opportunities. Investors should note that the conflicts inherent in making such allocation decisions may
not always be resolved to a Fund’s advantage. There can be no assurance that a Fund will have an opportunity to participate
in certain opportunities that fall within their investment objectives.
To seek to reduce potential conflicts of interest and to attempt to allocate
such investment opportunities in a fair and equitable manner, the investment adviser has implemented allocation policies and procedures.
These policies and procedures are intended to give all clients of the investment adviser, including the Funds, fair access to investment
opportunities consistent with the requirements of organizational documents, investment strategies, applicable laws and regulations,
and the fiduciary duties of the investment adviser. Each client of the investment adviser that is subject to the allocation policies
and procedures, including each Fund, is assigned an investment team and portfolio manager(s) by the investment adviser. The investment
team and portfolio managers review investment opportunities and will decide with respect to the allocation of each opportunity
considering various factors and in accordance with the allocation policies and procedures. The allocation policies and procedures
are subject to change. Investors should note that the conflicts inherent in making such allocation decisions may not always be
resolved to the advantage of a Fund.
It is possible that Morgan Stanley or an Affiliated Investment Account,
including another Eaton Vance fund, will invest in or advise a company that is or becomes a competitor of a company of which a
Fund holds an investment. Such investment could create a conflict between the Fund, on the one hand, and Morgan Stanley or the
Affiliated Investment Account, on the other hand. In such a situation, Morgan Stanley may also have a conflict in the allocation
of its own resources to the portfolio investment. Furthermore, certain Affiliated Investment Accounts will be focused primarily
on investing in other funds which may have strategies that overlap and/or directly conflict and compete with a Fund.
In addition, certain investment professionals who are involved in a Fund’s
activities remain responsible for the investment activities of other Affiliated Investment Accounts managed by the investment adviser
and its affiliates, and they will devote time to the management of such investments and other newly created Affiliated Investment
Accounts (whether in the form of funds, separate accounts or other vehicles), as well as their own investments. In addition, in
connection with the management of investments for other Affiliated Investment Accounts, members of Morgan Stanley and its affiliates
may serve on the boards of directors of or advise companies which may compete with a Fund’s portfolio investments. Moreover,
these Affiliated Investment Accounts managed by Morgan Stanley and its affiliates may pursue investment opportunities that may
also be suitable for a Fund.
It should be noted that Morgan Stanley may, directly or indirectly, make
large investments in certain of its Affiliated Investment Accounts, and accordingly Morgan Stanley’s investment in a Fund
may not be a determining factor in the outcome of any of the foregoing conflicts. Nothing herein restricts or in any way limits
the activities of Morgan Stanley, including its ability to buy or sell interests in, or provide financing to, equity and/or debt
instruments, funds or portfolio companies, for its own accounts or for the accounts of Affiliated Investment Accounts or other
investment funds or clients in accordance with applicable law.
Different clients of the investment adviser, including a Fund, may invest
in different classes of securities of the same issuer, depending on the respective clients’ investment objectives and policies.
As a result, the investment adviser and its affiliates, at times, will seek to satisfy fiduciary obligations to certain clients
owning one class of securities of a particular issuer by pursuing or enforcing rights on behalf of those clients with respect to
such class of securities, and those activities may have an adverse effect on another client which owns a different class of securities
of such issuer. For example, if one client holds debt securities of an issuer and another client holds equity securities of the
same issuer, if the issuer experiences financial or operational challenges, the investment adviser and its affiliates may seek
a liquidation of the issuer on behalf of the client that holds the debt securities, whereas the client holding the equity securities
may benefit from a reorganization of the issuer. Thus, in such situations, the actions taken by the investment adviser or its affiliates
on behalf of one client can negatively impact securities held by another client. These conflicts also exist as between the investment
adviser’s clients, including the Funds, and the Affiliated Investment Accounts managed by Morgan Stanley.
The investment adviser and its affiliates may give advice and recommend
securities to other clients which may differ from advice given to, or securities recommended or bought for, a Fund even though
such other clients’ investment objectives may be similar to those of the Fund.
The investment adviser and its affiliates manage long and short portfolios.
The simultaneous management of long and short portfolios creates conflicts of interest in portfolio management and trading in that
opposite directional positions may be taken in client accounts managed by the same investment team, and creates risks such as:
(i) the risk that short sale activity could adversely affect the market value of long positions in one or more portfolios (and
vice versa) and (ii) the risks associated with the trading desk receiving opposing orders in the same security simultaneously.
The investment adviser and its affiliates have adopted policies and procedures that are reasonably designed to mitigate these conflicts.
In certain circumstances, the investment adviser invest on behalf of itself in securities and other instruments that would be appropriate
for, held by, or may fall within the investment guidelines of its clients, including a Fund. At times, the investment adviser will
give advice or take action for its own accounts that differs from, conflicts with, or is adverse to advice given or action taken
for any client.
From time to time, conflicts also arise due to the fact that certain securities
or instruments maybe held in some client accounts, including a Fund, but not in others, or the client accounts may have different
levels of holdings in certain securities or instruments, and because the accounts pay different levels of fees to the investment
adviser. In addition, at times an investment adviser investment team will give advice or take action with respect to the investments
of one or more clients that is not given or taken with respect to other clients with similar investment programs, objectives, and
strategies. Accordingly, clients with similar strategies will not always hold the same securities or instruments or achieve the
same performance. The investment adviser’s investment teams also advise clients with conflicting programs, objectives or
strategies. These conflicts also exist as between the investment adviser’s clients, including the Funds, and the Affiliated
Investment Accounts managed by Morgan Stanley.
The investment adviser maintains separate trading desks by investment
team and generally based on asset class, including two trading desks trading equity securities. These trading desks operate independently
of one another. The two equity trading desks do not share information. The separate equity trading desks may result in one desk
competing against the other desk when implementing buy and sell transactions, possibly causing certain accounts to pay more or
receive less for a security than other accounts. In addition, Morgan Stanley and its affiliates maintain separate trading desks
that operate independently of each other and do not share information with the investment adviser. The Morgan Stanley and affiliate
trading desks may compete against the investment adviser trading desks when implementing buy and sell transactions, possibly causing
certain Affiliated Investment Accounts to pay more or receive less for a security than other Affiliated Investment Accounts.
Payments to Broker-Dealers
and Other Financial Intermediaries. The investment adviser and/or EVD may pay compensation, out of their own funds and not
as an expense of the Funds, to certain financial intermediaries (which may include affiliates of the investment adviser and EVD),
including recordkeepers and administrators of various deferred compensation plans, in connection with the sale, distribution, marketing
and retention of shares of the Funds and/or shareholder servicing. For example, the investment adviser or EVD may pay additional
compensation to a financial intermediary for, among other things, promoting the sale and distribution of Fund shares, providing
access to various programs, mutual fund platforms or preferred or recommended mutual fund lists that may be offered by a financial
intermediary, granting EVD access to a financial intermediary’s financial advisors and consultants, providing assistance
in the ongoing education and training of a financial intermediary’s financial personnel, furnishing marketing support, maintaining
share balances and/or for sub-accounting, recordkeeping, administrative, shareholder or transaction processing services. Such payments
are in addition to any distribution fees, shareholder servicing fees and/or transfer agency fees that may be payable by the Funds.
The additional payments may be based on various factors, including level of sales (based on gross or net sales or some specified
minimum sales or some other similar criteria related to sales of the Funds and/or some or all other Eaton Vance funds), amount
of assets invested by the financial intermediary’s customers (which could include current or aged assets of the Funds and/or some or all other Eaton Vance funds), a Fund’s
advisory fee, some other agreed upon amount or other measures as determined from time to time by the investment adviser and/or
EVD. The amount of these payments may be different for different financial intermediaries.
The prospect of receiving, or the receipt of, additional compensation,
as described above, by financial intermediaries may provide such financial intermediaries and their financial advisors and other
salespersons with an incentive to favor sales of shares of the Funds over other investment options with respect to which these
financial intermediaries do not receive additional compensation (or receives lower levels of additional compensation). These payment
arrangements, however, will not change the price that an investor pays for shares of the Funds or the amount that the Funds receive
to invest on behalf of an investor. Investors may wish to take such payment arrangements into account when considering and evaluating
any recommendations relating to Fund shares and should review carefully any disclosures provided by financial intermediaries as
to their compensation.
Morgan Stanley Trading
and Principal Investing Activities. Notwithstanding anything to the contrary herein, Morgan Stanley will generally conduct
its sales and trading businesses, publish research and analysis, and render investment advice without regard for a Fund’s
holdings, although these activities could have an adverse impact on the value of one or more of the Fund’s investments, or
could cause Morgan Stanley to have an interest in one or more portfolio investments that is different from, and potentially adverse
to that of a Fund. Furthermore, from time to time, the investment adviser or its affiliates may invest “seed” capital
in a Fund, typically to enable the Fund to commence investment operations and/or achieve sufficient scale. The investment adviser
and its affiliates may hedge such seed capital exposure by investing in derivatives or other instruments expected to produce offsetting
exposure. Such hedging transactions, if any, would occur outside of a Fund.
Morgan Stanley’s sales and trading, financing and principal investing
businesses (whether or not specifically identified as such, and including Morgan Stanley’s trading and principal investing
businesses) will not be required to offer any investment opportunities to a Fund. These businesses may encompass, among other things,
principal trading activities as well as principal investing.
Morgan Stanley’s sales and trading, financing and principal investing
businesses have acquired or invested in, and in the future may acquire or invest in, minority and/or majority control positions
in equity or debt instruments of diverse public and/or private companies. Such activities may put Morgan Stanley in a position
to exercise contractual, voting or creditor rights, or management or other control with respect to securities or loans of portfolio
investments or other issuers, and in these instances Morgan Stanley may, in its discretion and subject to applicable law, act to
protect its own interests or interests of clients, and not a Fund’s interests.
Subject to the limitations of applicable law, a Fund may purchase from
or sell assets to, or make investments in, companies in which Morgan Stanley has or may acquire an interest, including as an owner,
creditor or counterparty.
Morgan Stanley’s
Investment Banking Activities. Morgan Stanley advises clients on a variety of mergers, acquisitions, restructuring, bankruptcy
and financing transactions. Morgan Stanley may act as an advisor to clients, including other investment funds that may compete
with a Fund and with respect to investments that a Fund may hold. Morgan Stanley may give advice and take action with respect to
any of its clients or proprietary accounts that may differ from the advice given, or may involve an action of a different timing
or nature than the action taken, by a Fund. Morgan Stanley may give advice and provide recommendations to persons competing with
a Fund and/or any of a Fund’s investments that are contrary to the Fund’s best interests and/or the best interests
of any of its investments.
Morgan Stanley could be engaged in financial advising, whether on the
buy-side or sell-side, or in financing or lending assignments that could result in Morgan Stanley’s determining in its discretion
or being required to act exclusively on behalf of one or more third parties, which could limit a Fund’s ability to transact
with respect to one or more existing or potential investments. Morgan Stanley may have relationships with third-party funds, companies
or investors who may have invested in or may look to invest in portfolio companies, and there could be conflicts between a Fund’s
best interests, on the one hand, and the interests of a Morgan Stanley client or counterparty, on the other hand.
To the extent that Morgan Stanley advises creditor or debtor companies
in the financial restructuring of companies either prior to or after filing for protection under Chapter 11 of the U.S. Bankruptcy
Code or similar laws in other jurisdictions, the investment adviser’s flexibility in making investments in such restructurings
on a Fund’s behalf may be limited. Morgan Stanley could provide investment banking services to competitors of portfolio companies,
as well as to private equity and/or private credit funds; such activities may present Morgan Stanley with a conflict of interest
vis-a-vis a Fund’s investment and may also result in a conflict in respect of the allocation of investment banking resources
to portfolio companies.
To the extent permitted by applicable law, Morgan Stanley may provide
a broad range of financial services to companies in which a Fund invests, including strategic and financial advisory services,
interim acquisition financing and other lending and underwriting or placement of securities, and Morgan Stanley generally will
be paid fees (that may include warrants or other securities) for such services. Morgan Stanley will not share any of the
foregoing interest, fees and other compensation received by it (including, for the avoidance of doubt, amounts received by the
investment adviser) with a Fund, and any advisory fees payable will not be reduced thereby.
Morgan Stanley may be engaged to act as a financial advisor to a company
in connection with the sale of such company, or subsidiaries or divisions thereof, may represent potential buyers of businesses
through its mergers and acquisition activities and may provide lending and other related financing services in connection with
such transactions. Morgan Stanley’s compensation for such activities is usually based upon realized consideration and is
usually contingent, in substantial part, upon the closing of the transaction. Under these circumstances, a Fund may be precluded
from participating in a transaction with or relating to the company being sold or participating in any financing activity related
to merger or acquisition.
To meet applicable regulatory requirements, there are periods when the
investment adviser will not engage in certain types of transactions in the securities of companies for which a broker-dealer affiliated
with Morgan Stanley is performing investment banking services. Fund shareholders will not receive notice of such instances. In
particular, when a broker-dealer affiliated with Morgan Stanley is engaged in an underwriting or other distribution of securities
of a company, the investment adviser may be prohibited from purchasing such securities on behalf of a Fund. In addition, under
certain circumstances, the investment adviser generally will not initiate transactions in the securities of companies with respect
to which affiliates of the investment adviser may have controlling interests or are affiliated.
The investment adviser believes that the nature and range of clients to
whom Morgan Stanley and its subsidiaries render investment banking and other services is such that it would be inadvisable to exclude
these companies from the Fund’s portfolio.
Morgan Stanley’s
Marketing Activities. Morgan Stanley is engaged in the business of underwriting, syndicating, brokering, administering,
servicing, arranging and advising on the distribution of a wide variety of securities and other investments in which a Fund may
invest. Subject to the restrictions of the 1940 Act, including Sections 10(f) and 17(e) thereof, a Fund may invest in transactions
in which Morgan Stanley acts as underwriter, placement agent, syndicator, broker, administrative agent, servicer, advisor, arranger
or structuring agent and receives fees or other compensation from the sponsors of such products or securities. Any fees earned
by Morgan Stanley in such capacity will not be shared with the investment adviser or the Funds. Certain conflicts of interest,
in addition to the receipt of fees or other compensation, would be inherent in these transactions. Moreover, the interests of one
of Morgan Stanley’s clients with respect to an issuer of securities in which a Fund has an investment may be adverse to the
investment adviser’s or a Fund’s best interests. In conducting the foregoing activities, Morgan Stanley will be acting
for its other clients and will have no obligation to act in the investment adviser’s or a Fund’s best interests.
Client Relationships.
Morgan Stanley has existing and potential relationships with a significant number of corporations, institutions and individuals.
In providing services to its clients, Morgan Stanley may face conflicts of interest with respect to activities recommended to or
performed for such clients, on the one hand, and a Fund, its shareholders or the entities in which the Fund invests, on the other
hand. In addition, these client relationships may present conflicts of interest in determining whether to offer certain investment
opportunities to a Fund.
In acting as principal or in providing advisory and other services to
its other clients, Morgan Stanley may engage in or recommend activities with respect to a particular matter that conflict with
or are different from activities engaged in or recommended by the investment adviser on a Fund’s behalf.
Principal Investments.
To the extent permitted by applicable law, there may be situations in which a Funds’ interests may conflict with the
interests of one or more general accounts of Morgan Stanley and its affiliates or accounts managed by Morgan Stanley or itsaffiliates.
This may occur because these accounts hold public and private debt and equity securities of many issuers which may be or become
portfolio companies, or from whom portfolio companies may be acquired.
Transactions with
Portfolio Companies of Affiliated Investment Accounts. The companies in which a Fund may invest may be counterparties to
or participants in agreements, transactions or other arrangements with portfolio companies or other entities of portfolio investments
of Affiliated Investment Accounts (for example, a company in which a Fund invests may retain a company in which an Affiliated Investment
Account invests to provide services or may acquire an asset from such company or vice versa). Certain of these agreements, transactions
and arrangements involve fees, servicing payments, rebates and/or other benefits to Morgan Stanley or its affiliates. For example,
portfolio entities may, including at the encouragement of Morgan Stanley, enter into agreements regarding group procurement and/or
vendor discounts. Morgan Stanley and its affiliates may also participate in these agreements and may realize better pricing or
discounts as a result of the participation of portfolio entities. To the extent permitted by applicable law, certain of these agreements
may provide for commissions or similar payments and/or discounts or rebates to be paid to a portfolio entity of an Affiliated Investment
Account, and such payments or discounts or rebates may also be made directly to Morgan Stanley or its affiliates. Under these arrangements,
a particular portfolio company or other entity may benefit to a greater degree than the other participants,
and the funds, investment vehicles and accounts (which may or may not
include a Fund) that own an interest in such entity will receive a greater relative benefit from the arrangements than the Eaton
Vance funds, investment vehicles or accounts that do not own an interest therein. Fees and compensation received by portfolio companies
of Affiliated Investment Accounts in relation to the foregoing will not be shared with a Fund or offset advisory fees payable.
Investments in Portfolio
Investments of Other Funds. To the extent permitted by applicable law, when a Fund invests in certain companies or other
entities, other funds affiliated with the investment adviser may have made or may be making an investment in such companies or
other entities. Other funds that have been or may be managed by the investment adviser may invest in the companies or other entities
in which a Fund has made an investment. Under such circumstances, a Fund and such other funds may have conflicts of interest (e.g.,
over the terms, exit strategies and related matters, including the exercise of remedies of their respective investments). If the
interests held by a Fund are different from (or take priority over) those held by such other funds, the investment adviser may
be required to make a selection at the time of conflicts between the interests held by such other funds and the interests held
by a Fund.
Allocation of Expenses.
Expenses may be incurred that are attributable to a Fund and one or more other Affiliated Investment Accounts (including in connection
with issuers in which a Fund and such other Affiliated Investment Accounts have overlapping investments). The allocation of such
expenses among such entities raises potential conflicts of interest. The investment adviser and its affiliates intend to allocate
such common expenses among a Fund and any such other Affiliated Investment Accounts on a pro rata basis or in such other manner
as the investment adviser deems to be fair and equitable or in such other manner as may be required by applicable law.
Temporary Investments.
To more efficiently invest short-term cash balances held by a Fund, the investment adviser may invest such balances on an
overnight “sweep” basis in shares of one or more money market funds or other short-term vehicles. It is anticipated
that the investment adviser to these money market funds or other short-term vehicles may be the investment adviser (or an affiliate)
to the extent permitted by applicable law, including Rule 12d1-1 under the 1940 Act. The Funds currently invest in Eaton Vance
Cash Reserves Fund, LLC (Cash Reserves Fund), an affiliated investment company managed by Eaton Vance], for this purpose. Eaton
Vance does not currently receive a fee for advisory services provided to Cash Reserves Fund.
Transactions with
Affiliates. The investment adviser and any investment sub-adviser might purchase securities from underwriters or placement
agents in which a Morgan Stanley affiliate is a member of a syndicate or selling group, as a result of which an affiliate might
benefit from the purchase through receipt of a fee or otherwise. Neither the investment adviser nor any investment sub-adviser
will purchase securities on behalf of a Fund from an affiliate that is acting as a manager of a syndicate or selling group. Purchases
by the investment adviser on behalf of a Fund from an affiliate acting as a placement agent must meet the requirements of applicable
law. Furthermore, Morgan Stanley may face conflicts of interest when the Funds use service providers affiliated with Morgan Stanley
because Morgan Stanley receives greater overall fees when they are used.
General Process for
Potential Conflicts. All of the transactions described above involve the potential for conflicts of interest between the
investment adviser, related persons of the investment adviser and/or their clients. The Advisers Act, the 1940 Act and ERISA impose
certain requirements designed to decrease the possibility of conflicts of interest between an investment adviser and its clients.
In some cases, transactions may be permitted subject to fulfillment of certain conditions. Certain other transactions may be prohibited.
In addition, the investment adviser has instituted policies and procedures designed to prevent conflicts of interest from arising
and, when they do arise, to ensure that it effects transactions for clients in a manner that is consistent with its fiduciary duty
to its clients and in accordance with applicable law. The investment adviser seeks to ensure that potential or actual conflicts
of interest are appropriately resolved taking into consideration the overriding best interests of the client.
PARAMETRIC COMMODITY STRATEGY FUND
Supplement to Prospectus
dated May 1, 2020
PARAMETRIC EMERGING MARKETS FUND
PARAMETRIC INTERNATIONAL EQUITY FUND
PARAMETRIC VOLATILITY RISK PREMIUM – DEFENSIVE FUND
Supplement to Prospectuses
dated June 1, 2020
PARAMETRIC DIVIDEND INCOME FUND
Supplement to Prospectus
dated July 1, 2020
PARAMETRIC TAX-MANAGED EMERGING MARKETS FUND
Supplement to Prospectus dated November 1, 2020
1. The following replaces corresponding
disclosure under “Management.” in “Management and Organization”:
Each Fund’s investment adviser is Eaton Vance Management (“Eaton
Vance”). Eaton Vance has offices at Two International Place, Boston, MA 02110. Eaton Vance and its predecessor organizations
have been managing assets since 1924 and managing mutual funds since 1931. Prior to March 1, 2021, Eaton Vance was a wholly owned
subsidiary of Eaton Vance Corp. (“EVC”).
On March 1, 2021, Morgan Stanley acquired EVC (the “Transaction”)
and Eaton Vance became an indirect, wholly-owned subsidiary of Morgan Stanley. In connection with the Transaction, each Fund
entered into a new investment advisory agreement with Eaton Vance and Eaton Vance entered into a new investment sub-advisory agreement
with Parametric, (as defined below). Each such agreement was approved by shareholders prior to the consummation of the Transaction
and was effective upon its closing.
Morgan Stanley (NYSE: MS), whose principal offices are at 1585 Broadway,
New York, New York 10036, is a preeminent global financial services firm engaged in securities trading and brokerage activities,
as well as providing investment banking, research and analysis, financing and financial advisory services. As of December
30, 2020, after giving effect to the Transaction as described above, Morgan Stanley’s asset management operations had aggregate
assets under management of approximately $1.4 trillion.
Effective March 1, 2021, any fee reduction agreement previously applicable
to a Fund was incorporated into its new investment advisory agreement with Eaton Vance and/or its new investment sub-advisory agreement
with Parametric, as applicable.
Pursuant to investment sub-advisory agreements, Eaton Vance has delegated
the investment management of each Fund to Parametric Portfolio Associates LLC (“Parametric”). Parametric’s principal
offices are at 800 Fifth Avenue, Suite 2800, Seattle, WA 98104. Eaton Vance pays Parametric a portion of the advisory fee for sub-advisory
services provided to each Fund. On March 1, 2021, upon the closing of the Transaction, Parametric became an indirect, wholly-owned
subsidiary of Morgan Stanley. Prior to March 1, 2021, Parametric was an indirect, wholly-owned subsidiary of EVC.
2. The following replaces the
first paragraph under “Payments to Financial Intermediaries.” in “Purchasing Shares”:
Payments to Financial
Intermediaries. In addition to payments disclosed under “Sales Charges” below, the principal underwriter, out
of its own resources, may make cash payments to certain financial intermediaries (which may include affiliates of the principal
underwriter and investment adviser) who provide marketing support, transaction processing and/or administrative services and, in
some cases, include some or all Eaton Vance funds in preferred or specialized selling programs. Payments made by the principal
underwriter to a financial intermediary may be significant and are typically in the form of fees based on Fund sales, assets, transactions
processed and/or accounts attributable to that financial intermediary. Financial intermediaries also may receive amounts from the
principal underwriter in connection with educational or due diligence meetings that include information concerning Eaton Vance
funds. The principal underwriter may pay or allow other promotional incentives or payments to financial intermediaries to the extent
permitted by applicable laws and regulations.
3. The following replaces “Fund
Purchases through Edward D. Jones & Co., L.P. (“Edward Jones”)” under “Appendix A – Financial
Intermediary Sales Charge Variations” for Parametric Emerging Markets Fund and Parametric International Equity Fund:
Policies Regarding Transactions Through Edward
D. Jones & Co., L.P. (“Edward Jones”)
The following information has been provided by Edward Jones:
Effective on or after March 1, 2021, the following information supersedes
prior information with respect to transactions and positions held in fund shares through an Edward Jones system. Clients of Edward
Jones (also referred to as “shareholders”) purchasing fund shares on the Edward Jones commission and fee-based platforms
are eligible only for the following sales charge discounts (also referred to as “breakpoints”) and waivers, which can
differ from discounts and waivers described elsewhere in the mutual fund prospectus or statement of additional information (“SAI”)
or through another broker-dealer. In all instances, it is the shareholder's responsibility to inform Edward Jones at the time of
purchase of any relationship, holdings of fund family or other facts qualifying the purchaser for discounts or waivers. Edward
Jones can ask for documentation from the shareholder of such circumstance. Shareholders should contact Edward Jones if they have
questions regarding their eligibility for these discounts and waivers.
Breakpoints
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·
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Breakpoint pricing, otherwise known as volume pricing, at dollar thresholds as described in the prospectus.
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Rights of Accumulation (“ROA”)
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·
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The applicable sales charge on a purchase of Class A shares is determined by taking into account all share classes (except
certain money market funds and any assets held in group retirement plans) of the mutual fund family held by the shareholder or
in an account grouped by Edward Jones with other accounts for the purpose of providing certain pricing considerations (“pricing
groups”). If grouping assets as a shareholder, this includes all share classes held on the Edward Jones platform and/or held
on another platform. The inclusion of eligible fund family assets in the ROA calculation is dependent on the shareholder notifying
Edward Jones of such assets at the time of calculation. Money market funds are included only if such shares were sold with a sales
charge at the time of purchase or acquired in exchange for shares purchased with a sales charge.
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·
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The employer maintaining a SEP IRA plan and/or SIMPLE IRA plan may elect to establish or change ROA for the IRA accounts associated
with the plan to a plan-level grouping as opposed to including all share classes at a shareholder or pricing group level.
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·
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ROA is determined by calculating the higher of cost minus redemptions or market value (current shares x NAV).
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Letter of Intent (“LOI”)
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·
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Through a LOI, shareholders can receive the sales charge and breakpoint discounts for purchases shareholders intend to make
over a 13-month period from the date Edward Jones receives the LOI. The LOI is determined by calculating the higher of cost or
market value of qualifying holdings at LOI initiation in combination with the value that the shareholder intends to buy over a
13-month period to calculate the front-end sales charge and any breakpoint discounts. Each purchase the shareholder makes during
that 13-month period will receive the sales charge and breakpoint discount that applies to the total amount. If during the 13-month
period the shareholder redeems any of the shares purchased pursuant to a LOI, the value of the redeemed shares will not be included
for purposes of satisfying the LOI. The inclusion of eligible fund family assets in the LOI calculation is dependent on the shareholder
notifying Edward Jones of such assets at the time of calculation. Purchases made before the LOI is received by Edward Jones are
not adjusted under the LOI and will not reduce the sales charge previously paid. Sales charges will be adjusted if LOI is not met.
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·
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If the employer maintaining a SEP IRA plan and/or SIMPLE IRA plan has elected to establish or change ROA for the IRA accounts
associated with the plan to a plan-level grouping, LOIs will also be at the plan-level and may only be established by the employer.
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Front-end Sales Charge Waivers
Sales charges are waived for the following shareholders and
in the following situations:
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·
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Associates of Edward Jones and its affiliates and their family members who are in the same pricing group (as determined by
Edward Jones under its policies and procedures) as the associate. This waiver will continue for the remainder of the associate's
life if the associate retires from Edward Jones in good-standing and remains in good standing pursuant to Edward Jones' policies
and procedures.
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·
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Shares purchased in an Edward Jones fee-based program.
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·
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Shares purchased through reinvestment of capital gains distributions and dividend reinvestment.
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·
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Shares purchased from the proceeds of redeemed shares of the same fund family so long as the following conditions are met: 1) the proceeds are from the sale of shares
within 60 days of the purchase, and 2) the sale and purchase are made in the same share class and the same account or the purchase
is made in an individual retirement account with proceeds from liquidations in a non-retirement account.
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·
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Shares exchanged into Class A shares from another share class so long as the exchange is into the same fund and was initiated
at the discretion of Edward Jones. Edward Jones is responsible for any remaining Contingent Deferred Sales Charge (“CDSC”)
due to the fund company or its affiliate, if applicable. Any future purchases are subject to the applicable sales charge as disclosed
in the prospectus.
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·
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Exchanges from Class C shares to Class A shares of the same fund, generally, in the 84th month following the anniversary of
the purchase date or earlier at the discretion of Edward Jones.
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CDSC Waivers
If the shareholder purchases shares that are subject to a CDSC
and those shares are redeemed before the CDSC is expired, the shareholder is responsible to pay the CDSC except in the following
conditions:
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·
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The death or disability of the shareholder.
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·
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Systematic withdrawals with up to 10% per year of the account value.
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·
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Return of excess contributions from an Individual Retirement Account (IRA).
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Shares sold as part of a required minimum distribution for IRA and retirement accounts if the redemption is taken in or after
the year the shareholder reaches qualified age based on applicable IRS regulations.
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·
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Shares sold to pay Edward Jones fees or costs in such cases where the transaction is initiated by Edward Jones. Edward Jones
is responsible for any remaining CDSC due to the fund company or its affiliate, if applicable.
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·
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Shares exchanged in an Edward Jones fee-based program. Edward Jones is responsible for any remaining CDSC due to the fund company
or its affiliate, if applicable.
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·
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Shares acquired through NAV reinstatement.
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·
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Shares redeemed at the discretion of Edward Jones for Minimum Balances as described below.
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******************************************************************************
Other Important Information Regarding Transactions Through Edward Jones
Minimum Purchase Amounts
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Initial purchase minimum: $250
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Subsequent purchase minimum: none
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Minimum Balances
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Edward Jones has the right to redeem at its discretion fund holdings with a balance of $250 or less. The following are examples
of accounts that are not included in this policy:
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·
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A fee-based account held on an Edward Jones platform
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·
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A 529 account held on an Edward Jones platform
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·
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An account with an active systematic investment plan or LOI
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Exchanging Share Classes
At any time it deems necessary, Edward Jones has the authority to exchange
at NAV a shareholder's holdings in a fund to Class A shares of the same fund. Edward Jones is responsible for any remaining CDSC
due to the fund company or its affiliate, if applicable. Any future purchases are subject to the applicable sales charge as disclosed
in the prospectus.
March 1, 2021
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37968 3.1.21
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PARAMETRIC COMMODITY STRATEGY FUND
Supplement to Statement of Additional Information
(“SAI”) dated May 1, 2020
PARAMETRIC EMERGING MARKETS FUND
PARAMETRIC INTERNATIONAL EQUITY FUND
PARAMETRIC VOLATILITY RISK PREMIUM – DEFENSIVE FUND
Supplement to SAIs dated June 1, 2020
PARAMETRIC DIVIDEND INCOME FUND
Supplement to SAI dated July 1, 2020
PARAMETRIC TAX-MANAGED EMERGING MARKETS FUND
Supplement to SAI dated November 1, 2020
1. The following replaces the
first paragraph under “Fund Management.” in “Management and Organization”:
Fund Management.
The Trustees of the Trust are responsible for the overall management and supervision of the affairs
of the Trust. The Board members and officers of the Trust are listed below. Except as indicated, each individual has held the office
shown or other offices in the same company for the last five years. Board members hold indefinite terms of office. Each Trustee
holds office until his or her successor is elected and qualified, subject to a prior death, resignation, retirement, disqualification
or removal. Under the terms of each Fund’s Trustee retirement policy, an Independent Trustee must retire and resign
as a Trustee on the earlier of: (i) the first day of July following his or her 74th birthday; or (ii), with limited exception,
December 31st of the 20th year in which he or she has served as a Trustee. However, if such retirement and resignation would cause
each Fund to be out of compliance with Section 16 of the 1940 Act or any other regulations or guidance of the SEC, then such
retirement and resignation will not become effective until such time as action has been taken for each Fund to be in compliance
therewith. The “noninterested Trustees” consist of those Trustees who are not “interested persons” of the
Trust, as that term is defined under the 1940 Act. The business address of each Board member and officer is Two International Place,
Boston, Massachusetts 02110. As used in this SAI, “EVC” refers to Eaton Vance Corp., “EV” refers to Eaton
Vance, Inc., “Eaton Vance” refers to Eaton Vance Management and “EVD” refers to Eaton Vance Distributors,
Inc. (see “Principal Underwriter” under “Other Service Providers”). EV is the trustee of each of Eaton
Vance and BMR. Effective March 1, 2021, each of Eaton Vance, BMR, EVD and EV are indirect wholly-owned subsidiaries of Morgan Stanley.
Each officer affiliated with Eaton Vance may hold a position with other Eaton Vance affiliates that is comparable to his or her
position with Eaton Vance listed below.
2. The following replaces the
Thomas E. Faust Jr. row in the Trustees table and in his biographical narrative in “Management and Organization”:
THOMAS E. FAUST JR.
1958
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Trustee
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Since 2007
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Chairman of Morgan Stanley Investment Management, Inc. (MSIM), Director and President of EV, Chief Executive Officer and President of Eaton Vance and BMR, and Director of EVD. Formerly, Chairman, Chief Executive Officer and President of EVC. Trustee and/or officer of 141 registered investment companies. Mr. Faust is an interested person because of his positions with MSIM, BMR, Eaton Vance, EVD and EV, which are affiliates of the Trust, and his former position with EVC, which was an affiliate of the Trust prior to March 1, 2021.
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141
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Formerly, Director of EVC (2007-2021) and Hexavest Inc. (2012-2021) (investment management firm).
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Thomas E. Faust
Jr. Mr. Faust has served as a member of the Eaton Vance Fund Boards since 2007. Effective March 1, 2021, he is Chairman
of MSIM. He is also Director and President of EV, Chief Executive Officer and President of Eaton Vance and BMR, and Director of
EVD. Mr. Faust previously served as Chairman and Chief Executive Officer of EVC from 2007 through March 1, 2021 and as President
of EVC from 2006 through March 1, 2021. Mr. Faust served as a Director of Hexavest Inc. from 2012-2021. From 2016 through 2019,
Mr. Faust served as a Director of SigFig Wealth Management LLC. Mr. Faust previously served as an equity analyst, portfolio manager,
Director of Equity Research and Management and Chief Investment Officer of Eaton Vance from 1985-2007. He holds B.S. degrees in
Mechanical Engineering and Economics from the Massachusetts Institute of Technology and an MBA from Harvard Business School. Mr.
Faust has been a Chartered Financial Analyst since 1988. He is a trustee and member of the executive committee of the Boston Symphony
Orchestra, Inc. and trustee emeritus of Wellesley College.
3. The following is added as
the first paragraph under “Investment Advisory Services” in “Investment Advisory and Administrative Services”:
As described in the Prospectus, upon the closing of the transaction by
which Morgan Stanley acquired EVC (the “Transaction”), each Fund entered into a new investment advisory agreement or
investment advisory and administrative agreement with Eaton Vance, and Eaton Vance entered into a new investment sub-advisory agreement
with Parametric.
4. The following replaces the
last paragraph under “Investment Advisory Services.” in “Investment Advisory and Administrative Services”:
Each Investment Advisory Agreement or Investment Advisory and Administrative
Agreement and Investment Sub-Advisory Agreement with the investment adviser or sub-adviser continues in effect through and including
the second anniversary of its execution and shall continue in full force and effect indefinitely thereafter, but only so long as
such continuance after such second anniversary is specifically approved at least annually (i) by the vote of a majority of the
noninterested Trustees of the Trust, cast in person at a meeting specifically called for the purpose of voting on such approval
and (ii) by the Board of the Trust, or by vote of a majority of the outstanding voting securities of the Fund. Each Agreement may
be terminated at any time without penalty on sixty (60) days’ written notice by either party, or by vote of the majority
of the outstanding voting securities of the Fund, and each Agreement will terminate automatically in the event of its assignment. Each
Agreement provides that the investment adviser may render services to others. Each Agreement also provides that the investment
adviser shall not be liable for any loss incurred in connection with the performance of its duties, or action taken or omitted
under the Agreement, in the absence of willful misfeasance, bad faith, gross negligence or reckless disregard of its obligations
and duties thereunder, or for any losses sustained in the acquisition, holding or disposition of any security or other investment.
Each Agreement is not intended to, and does not, confer upon any person not a party to it any right, benefit or remedy of any nature,
except that the new sub-advisory agreements with Parametric (as described above) state that each Fund is a third party beneficiary
of such agreement.
5. The following replaces “Information
About Eaton Vance.” in “Investment Advisory and Administrative Services”:
Information About
Eaton Vance. Eaton Vance is a business trust organized under the laws of the Commonwealth of Massachusetts. EV serves
as trustee of BMR and Eaton Vance. As described in the Prospectus, following the closing of the Transaction on March 1, 2021, EV,
Eaton Vance and BMR became indirect wholly-owned subsidiaries of Morgan Stanley (NYSE: MS), a preeminent global financial services
firm engaged in securities trading and brokerage activities, as well as providing investment banking, research and analysis, financing
and financial advisory services.
Prior to March 1, 2021, EV and Eaton Vance are wholly-owned subsidiaries
of EVC, a Maryland corporation and publicly-held holding company and BMR was an indirect wholly owned subsidiary of EVC. EVC through
its subsidiaries and affiliates engaged primarily in investment management, administration and marketing activities. The Directors
of EVC were Thomas E. Faust Jr., Ann E. Berman, Leo I. Higdon, Jr., Paula A. Johnson, Brian D. Langstraat, Dorothy E. Puhy, Winthrop
H. Smith, Jr. and Richard A. Spillane, Jr. All shares of the outstanding Voting Common Stock of EVC were deposited in a Voting
Trust, the Voting Trustees of which were Mr. Faust, Paul W. Bouchey, Craig R. Brandon, Daniel C. Cataldo, Michael A. Cirami, Cynthia
J. Clemson, James H. Evans, Maureen A. Gemma, Laurie G. Hylton, Mr. Langstraat, Thomas Lee, Frederick S. Marius, David C. McCabe,
Edward J. Perkin, Lewis R. Piantedosi, Charles B. Reed, Craig P. Russ, Thomas C. Seto, John L. Shea, Eric A. Stein, John H. Streur,
Andrew N. Sveen, Payson F. Swaffield, R. Kelly Williams and Matthew J. Witkos (all of whom are or were officers of Eaton Vance
or its affiliates). The Voting Trustees had unrestricted voting rights for the election of Directors of EVC. Prior to March 1,
2021, all of the outstanding voting trust receipts issued under said Voting Trust were owned by certain of the officers of BMR
and Eaton Vance who may also have been officers, or officers and Directors of EVC and EV. As indicated under “Management
and Organization,” all of the officers of the Trust (as well as Mr. Faust who is also a Trustee) are employees of Eaton Vance
and/or BMR.
6. The following replaces “Information
About Parametric.” in “Investment Advisory and Administrative Services”:
Information About
Parametric. Parametric is an investment manager that has been providing investment advisory services since its formation
in 1987. Headquartered in Seattle, Parametric has offices in Minneapolis, New York City, Boston and Westport, Connecticut. As described
in the Prospectus, following the closing of the Transaction on March 1, 2021, Parametric became an indirect wholly-owned subsidiary
of Morgan Stanley. Prior to March 1, 2021, Parametric was an indirect wholly-owned subsidiary of EVC.
7. The following replaces “Compensation
Structure for Parametric.” and “Method to Determine Compensation.” in “Investment Advisory and Administrative
Services”:
Compensation Structure
for Parametric. Compensation of Parametric portfolio managers and other investment professionals has three primary
components: (1) a base salary, (2) an annual cash bonus, and (3) annual equity-based compensation awards that are subject to a
fixed vesting and distribution schedule. Stock-based compensation awards and adjustments in base salary and bonuses are typically paid and/or put into effect at or
shortly after, the firm’s fiscal year-end, December 31.
Method to Determine
Compensation. Parametric seeks to compensate portfolio managers commensurate with their responsibilities and performance
while remaining competitive with other firms within the investment management industry. In the case of investment strategies that
are systematic, including the Fund’s, portfolio managers primarily are measured with respect to whether a strategy’s
rules as implemented delivered on the strategy’s objectives. In evaluating the foregoing, Parametric evaluates the manner
in which the strategy is implemented relative to strategy targets, rebalancing portfolio exposures consistent with pre-determined
triggers, and judicious trade construction. Portfolio managers are also expected to monitor factors that may impact implementation
of a strategy and to seek potential ways to address them as needed.
Salaries, bonuses and stock-based compensation are also influenced by
the operating performance of Parametric and Morgan Stanley. While the salaries of Parametric portfolio managers are comparatively
fixed, cash bonuses and stock-based compensation may fluctuate from year to year, based on changes in financial performance and
other factors.
Parametric participates in compensation surveys that benchmark salaries,
total cash and total compensation against other firms in the industry. This data is reviewed, along with a number of other factors,
to ensure that compensation remains competitive with other firms in the industry.
8. The following replaces the
first two paragraphs in “Other Service Providers”:
Principal Underwriter.
Eaton Vance Distributors, Inc. (“EVD”), Two International Place, Boston, MA 02110 is
the principal underwriter of each Fund. The principal underwriter acts as principal in selling shares under a Distribution Agreement
with the Trust. The expenses of printing copies of prospectuses used to offer shares and other selling literature and of advertising
are borne by the principal underwriter. The fees and expenses of qualifying and registering and maintaining qualifications and
registrations of a Fund and its shares under federal and state securities laws are borne by the Fund. The Distribution Agreement
is renewable annually by the members of the Board (including a majority of the noninterested Trustees who have no direct or indirect
financial interest in the operation of the Distribution Agreement or any applicable Distribution Plan), may be terminated on sixty
days’ notice either by such Trustees or by vote of a majority of the outstanding Fund shares or on six months’ notice
by the principal underwriter and is automatically terminated upon assignment. The principal underwriter distributes shares on a
“best efforts” basis under which it is required to take and pay for only such shares as may be sold. Effective March
1, 2021, EVD is an indirect wholly-owned subsidiary of Morgan Stanley. Prior to March 1, 2021, EVD was a direct, wholly-owned subsidiary
of EVC. Mr. Faust is also a Director of EVD. EVD also serves as placement agent for the Portfolio, if applicable.
Custodian.
State Street Bank and Trust Company (“State Street”), State Street Financial Center,
One Lincoln Street, Boston, MA 02111, serves as custodian to each Fund and Portfolio, if applicable. State Street has custody of
all cash and securities representing a Fund’s interest in the Portfolio, has custody of the Portfolio’s and each
Fund's assets, maintains the general ledger of the Portfolio and each Fund and computes the daily net asset value of interests
in the Portfolio and the net asset value of shares of each Fund. In such capacity it attends to details in connection with the
sale, exchange, substitution, transfer or other dealings with each Fund's and the Portfolio’s investments, receives and disburses
all funds and performs various other ministerial duties upon receipt of proper instructions from the Trust and the Portfolio. State
Street also provides services in connection with the preparation of shareholder reports and the electronic filing of such reports
with the SEC.
9. The following replaces the
corresponding disclosure in “Portfolio Securities Transactions”:
Decisions concerning the execution of portfolio security transactions,
including the selection of the market and the broker-dealer firm or other financial intermediary (each an “intermediary”),
are made by the investment adviser. Each Fund is responsible for the expenses associated with its portfolio transactions. The investment
adviser is also responsible for the execution of transactions for all other accounts managed by it. The investment adviser places
the portfolio security transactions for execution with one or more intermediaries firms. The investment adviser uses its best efforts
to obtain execution of portfolio security transactions at prices that, in the investment adviser’s judgment, are advantageous
to the client and at a reasonably competitive spread or (when a disclosed commission is being charged) at reasonably competitive
commission rates. In seeking such execution, the investment adviser will use its best judgment in evaluating the terms of a transaction,
and will give consideration to various relevant factors, which may include, without limitation, the full range and quality of the
intermediary’s services, responsiveness of the intermediary to the investment adviser, the size and type of the transaction,
the nature and character of the market for the security, the confidentiality, speed and certainty of effective execution required
for the transaction, the general execution and operational capabilities of the intermediary, the reputation, reliability, experience
and financial condition of the intermediary, the value and quality of the services rendered by the intermediary in this and other
transactions, and the amount of the spread or commission, if any. In addition, the investment adviser may consider the receipt
of Research Services (as defined below), provided it does not compromise the investment adviser’s obligation to seek best
overall execution for a Fund and is otherwise in compliance with applicable law. The investment adviser may engage in portfolio
transactions with an intermediary that sells shares of Eaton Vance funds, provided such transactions are not directed to that intermediary as compensation
for the promotion or sale of such shares.
As described in the Prospectus, following the closing of the Transaction
on March 1, 2021, the investment adviser became an “affiliated person,” as defined in the 1940 Act, of Morgan Stanley
and its affiliates, including certain intermediaries (as previously defined). As a result, the investment adviser is subject to
certain restrictions regarding transactions with Morgan Stanley-affiliated intermediaries, as set forth in the 1940 Act. Under
certain circumstances, such restrictions may limit the investment adviser’s ability to place portfolio transactions on behalf
of a Fund at the desired time or price. Any transaction the investment adviser enters into with a Morgan Stanley-affiliated intermediary
on behalf of a Fund will be done in compliance with applicable laws, rules, and regulations; will be subject to any restrictions
contained in a Fund’s investment advisory agreement; will be subject to the investment adviser’s duty to seek best
execution; and, will comply with any applicable policies and procedures of the investment adviser, as described below.
Subject to the overriding objective of obtaining the best execution of
orders and applicable rules and regulations, as described above, a Fund may use an affiliated intermediary, including a Morgan
Stanley-affiliated intermediary, to effect Fund portfolio transactions, including transactions in futures contracts and options
on futures contracts, under procedures adopted by the Board. In order to use such affiliated intermediaries, the Fund’s Board
must approve and periodically review procedures reasonably designed to ensure that commission rates and other remuneration paid
to the affiliated intermediaries are fair and reasonable in comparison to those of other intermediaries for comparable transactions
involving similar securities being purchased or sold during a comparable time period.
Pursuant to an order issued by the SEC, a Fund is permitted to engage in
principal transactions in money market instruments, subject to certain conditions, with Morgan Stanley & Co. LLC, a broker-dealer
affiliated with Morgan Stanley.
Transactions on stock exchanges and other agency transactions involve the
payment of negotiated brokerage commissions. Such commissions vary among different broker-dealer firms, and a particular broker-dealer
may charge different commissions according to such factors as the difficulty and size of the transaction and the volume of business
done with such broker-dealer. Transactions in foreign securities often involve the payment of brokerage commissions, which may
be higher than those in the United States. There is generally no stated commission in the case of securities traded in the over-the-counter
markets including transactions in fixed-income securities which are generally purchased and sold on a net basis (i.e., without
commission) through intermediaries and banks acting for their own account rather than as brokers. Such intermediaries attempt to
profit from such transactions by buying at the bid price and selling at the higher asked price of the market for such obligations,
and the difference between the bid and asked price is customarily referred to as the spread. Fixed-income transactions may also
be transacted directly with the issuer of the obligations. In an underwritten offering the price paid often includes a disclosed
fixed commission or discount retained by the underwriter or dealer. Although spreads or commissions paid on portfolio security
transactions will, in the judgment of the investment adviser, be reasonable in relation to the value of the services provided,
commissions exceeding those which another firm might charge may be paid to intermediaries who were selected to execute transactions
on behalf of the investment adviser’s clients in part for providing brokerage and research services to the investment adviser
as permitted by applicable law.
Research Services provided by (and produced by) broker-dealers that execute
portfolio transactions or from affiliates of executing broker-dealers are referred to as “Proprietary Research.” Except
for trades executed in jurisdictions where such consideration is not permissible, the investment adviser may and does consider
the receipt of Proprietary Research Services as a factor in selecting broker dealers to execute client portfolio transactions,
provided it does not compromise the investment adviser’s obligation to seek best overall execution. In jurisdictions where
permissible, the investment adviser also may consider the receipt of Research Services under so called “client commission
arrangements” or “commission sharing arrangements” (both referred to as “CCAs”) as a factor in selecting
broker dealers to execute transactions, provided it does not compromise the investment adviser’s obligation to seek best
overall execution. Under a CCA arrangement, the investment adviser may cause client accounts to effect transactions through a broker-dealer
and request that the broker-dealer allocate a portion of the commissions paid on those transactions to a pool of commission credits
that are paid to other firms that provide Research Services to the investment adviser. Under a CCA, the broker-dealer that provides
the Research Services need not execute the trade. Participating in CCAs may enable the investment adviser to consolidate payments
for research using accumulated client commission credits from transactions executed through a particular broker-dealer to periodically
pay for Research Services obtained from and provided by other firms, including other broker-dealers that supply Research Services.
The investment adviser believes that CCAs offer the potential to optimize the execution of trades and the acquisition of a variety
of high quality Research Services that the investment adviser might not be provided access to absent CCAs. The investment adviser
may enter into CCA arrangements with a number of broker-dealers and other firms, including certain affiliates of the investment
adviser. The investment adviser will only enter into and utilize CCAs to the extent permitted by Section 28(e) and other applicable
law.
The investment companies sponsored by the investment adviser or certain
of its affiliates also may allocate brokerage commissions to acquire information relating to the
performance, fees and expenses of such companies and other investment companies, which information is used by the members
of the Board of such companies to fulfill their responsibility to oversee the quality of the services provided to various entities, including the
investment adviser, to such companies. Such companies may also pay cash for such information.
Securities considered as investments for
each Fund, may also be appropriate for other investment accounts managed by the investment adviser or certain of its affiliates.
Whenever decisions are made to buy or sell securities by each Fund and one or more of such other accounts simultaneously, the investment
adviser will allocate the security transactions (including “new” issues) in a manner which it believes to be equitable
under the circumstances. As a result of such allocations, there may be instances where each Fund will not participate in a transaction
that is allocated among other accounts. If an aggregated order cannot be filled completely, allocations will generally be made
on a pro rata basis. An order may not be allocated on a pro rata basis where, for example: (i) consideration is given to portfolio
managers who have been instrumental in developing or negotiating a particular investment; (ii) consideration is given to an account
with specialized investment policies that coincide with the particulars of a specific investment; (iii) pro rata allocation would
result in odd-lot or de minimis amounts being allocated to a portfolio or other client; or (iv) where the investment adviser reasonably
determines that departure from a pro rata allocation is advisable. While these aggregation and allocation policies could have a
detrimental effect on the price or amount of the securities available to each Fund from time to time, it is the opinion
of the members of the Board that the benefits from the investment adviser organization outweigh any disadvantage that may arise
from exposure to simultaneous transactions.
10. The following is added as
a new section immediately prior to “Financial Statements”:
POTENTIAL CONFLICTS OF INTEREST
As a diversified global financial services firm, Morgan Stanley engages
in a broad spectrum of activities, including financial advisory services, investment management activities, lending, commercial
banking, sponsoring and managing private investment funds, engaging in broker-dealer transactions and principal securities, commodities
and foreign exchange transactions, research publication and other activities. In the ordinary course of its business, Morgan Stanley
is a full-service investment banking and financial services firm and therefore engages in activities where Morgan Stanley’s
interests or the interests of its clients may conflict with the interests of a Fund or Portfolio, if applicable, (collectively
for the purposes of this section, “Fund” or “Funds”). Morgan Stanley advises clients and sponsors, manages
or advises other investment funds and investment programs, accounts and businesses (collectively, together with the Funds, any
new or successor funds, programs, accounts or businesses, the ‘‘Affiliated Investment Accounts’’) with
a wide variety of investment objectives that in some instances may overlap or conflict with a Fund’s investment objectives
and present conflicts of interest. In addition, Morgan Stanley may also from time to time create new or successor Affiliated Investment
Accounts that may compete with a Fund and present similar conflicts of interest. The discussion below enumerates certain actual,
apparent and potential conflicts of interest. There is no assurance that conflicts of interest will be resolved in favor of Fund
shareholders and, in fact, they may not be. Conflicts of interest not described below may also exist.
Material Non-public
and Other Information. It is expected that confidential or material non-public information regarding an investment or potential
investment opportunity may become available to the investment adviser. If such information becomes available, the investment adviser
may be precluded (including by applicable law or internal policies or procedures) from pursuing an investment or disposition opportunity
with respect to such investment or investment opportunity.
The investment adviser may also from time to time be subject to contractual
‘‘stand-still’’ obligations and/or confidentiality obligations that may restrict its ability to trade in
certain investments on a Fund’s behalf. In addition, the investment adviser may be precluded from disclosing such information
to an investment team, even in circumstances in which the information would be beneficial if disclosed. Therefore, the investment
team may not be provided access to material non-public information in the possession of Morgan Stanley that might be relevant to
an investment decision to be made on behalf of a Fund, and the investment team may initiate a transaction or sell an investment
that, if such information had been known to it, may not have been undertaken. In addition, certain members of the investment team
may be recused from certain investment-related discussions so that such members do not receive information that would limit their
ability to perform functions of their employment with the investment adviser or its affiliates unrelated to that of a Fund. Furthermore,
access to certain parts of Morgan Stanley may be subject to third party confidentiality obligations and to information barriers
established by Morgan Stanley in order to manage potential conflicts of interest and regulatory restrictions, including without
limitation joint transaction restrictions pursuant to the 1940 Act. Accordingly, the investment adviser’s ability to source
investments from other business units within Morgan Stanley may be limited and there can be no assurance that the investment adviser
will be able to source any investments from any one or more parts of the Morgan Stanley network.
The investment adviser may restrict its investment decisions and activities
on behalf of the Funds in various circumstances, including because of applicable regulatory requirements or information held by
the investment adviser or Morgan Stanley. The investment adviser might not engage in transactions or other activities for, or enforce
certain rights in favor of, a Fund due to Morgan Stanley’s activities outside the Funds. In instances where trading of an
investment is restricted, the investment adviser may not be able to purchase or sell such investment on behalf
of a Fund, resulting in the Fund’s inability to participate in certain desirable transactions. This inability to buy or sell
an investment could have an adverse effect on a
Fund’s portfolio due to, among other things, changes in an investment’s
value during the period its trading is restricted. Also, in situations where the investment adviser is required to aggregate its
positions with those of other Morgan Stanley business units for position limit calculations, the investment adviser may have to
refrain from making investments due to the positions held by other Morgan Stanley business units or their clients. There may be
other situations where the investment adviser refrains from making an investment due to additional disclosure obligations, regulatory
requirements, policies, and reputational risk, or the investment adviser may limit purchases or sales of securities in respect
of which Morgan Stanley is engaged in an underwriting or other distribution capacity.
Morgan Stanley has established certain information barriers and other
policies to address the sharing of information between different businesses within Morgan Stanley. As a result of information barriers,
the investment adviser generally will not have access, or will have limited access, to certain information and personnel in other
areas of Morgan Stanley relating to business transactions for clients (including transactions in investing, banking, prime brokerage
and certain other areas), and generally will not manage the Funds with the benefit of the information held by such other areas.
Morgan Stanley, due to its access to and knowledge of funds, markets and securities based on its prime brokerage and other businesses,
may make decisions based on information or take (or refrain from taking) actions with respect to interests in investments of the
kind held (directly or indirectly) by the Funds in a manner that may be adverse to the Funds, and will not have any obligation
or other duty to share information with the investment adviser.
In limited circumstances, however, including for purposes of managing
business and reputational risk, and subject to policies and procedures, Morgan Stanley personnel, including personnel of the investment
adviser, on one side of an information barrier may have access to information and personnel on the other side of the information
barrier through “wall crossings.” The investment adviser faces conflicts of interest in determining whether to engage
in such wall crossings. Information obtained in connection with such wall crossings may limit or restrict the ability of the investment
adviser to engage in or otherwise effect transactions on behalf of the Funds (including purchasing or selling securities that the
investment adviser may otherwise have purchased or sold for a Fund in the absence of a wall crossing). In managing conflicts of
interest that arise because of the foregoing, the investment adviser generally will be subject to fiduciary requirements. The investment
adviser may also implement internal information barriers or ethical walls, and the conflicts described herein with respect to information
barriers and otherwise with respect to Morgan Stanley and the investment adviser will also apply internally within the investment
adviser. As a result, a Fund may not be permitted to transact in (e.g., dispose of a security in whole or in part) during periods
when it otherwise would have been able to do so, which could adversely affect a Fund. Other investors in the security that are
not subject to such restrictions may be able to transact in the security during such periods. There may also be circumstances in
which, as a result of information held by certain portfolio management teams in the investment adviser, the investment adviser
limits an activity or transaction for a Fund, including if the Fund is managed by a portfolio management team other than the team
holding such information.
Investments by Morgan
Stanley and its Affiliated Investment Accounts. In serving in multiple capacities to Affiliated Investment Accounts, Morgan
Stanley, including the investment adviser and its investment teams, may have obligations to other clients or investors in Affiliated
Investment Accounts, the fulfillment of which may not be in the best interests of a Fund or its shareholders. A Fund’s investment
objectives may overlap with the investment objectives of certain Affiliated Investment Accounts. As a result, the members of an
investment team may face conflicts in the allocation of suitable investment opportunities among a Fund and other investment funds,
programs, accounts and businesses advised by or affiliated with the investment adviser. Certain Affiliated Investment Accounts
may provide for higher management or incentive fees or greater expense reimbursements or overhead allocations, all of which may
contribute to this conflict of interest and create an incentive for the investment adviser to favor such other accounts.
Morgan Stanley currently invests and plans to continue to invest on its
own behalf and on behalf of its Affiliated Investment Accounts in a wide variety of investment opportunities globally. Morgan Stanley
and its Affiliated Investment Accounts, to the extent consistent with applicable law and policies and procedures, will be permitted
to invest in investment opportunities without making such opportunities available to a Fund beforehand. Subject to the foregoing,
Morgan Stanley may offer investments that fall into the investment objectives of an Affiliated Investment Account to such account
or make such investment on its own behalf, even though such investment also falls within a Fund’s investment objectives.
A Fund may invest in opportunities that Morgan Stanley and/or one or more Affiliated Investment Accounts has declined, and vice
versa. All of the foregoing may reduce the number of investment opportunities available to a Fund and may create conflicts of interest
in allocating investment opportunities. Investors should note that the conflicts inherent in making such allocation decisions may
not always be resolved to a Fund’s advantage. There can be no assurance that a Fund will have an opportunity to participate
in certain opportunities that fall within their investment objectives.
To seek to reduce potential conflicts of interest and to attempt to allocate
such investment opportunities in a fair and equitable manner, the investment adviser has implemented allocation policies and
procedures. These policies and procedures are intended to give all clients of the investment adviser, including the Funds, fair
access to investment opportunities consistent with the requirements of organizational documents, investment strategies, applicable
laws and regulations, and the fiduciary duties of the investment adviser. Each client of the investment adviser that is subject
to the allocation
policies and procedures, including each Fund, is assigned an investment team and portfolio manager(s) by the
investment adviser. The investment team and portfolio managers review investment opportunities and will decide with respect to
the allocation of each opportunity considering various factors and in accordance with the allocation policies and procedures. The
allocation policies and procedures are subject to change. Investors should note that the conflicts inherent in making such allocation
decisions may not always be resolved to the advantage of a Fund.
It is possible that Morgan Stanley or an Affiliated Investment Account,
including another Eaton Vance fund, will invest in or advise a company that is or becomes a competitor of a company of which a
Fund holds an investment. Such investment could create a conflict between the Fund, on the one hand, and Morgan Stanley or the
Affiliated Investment Account, on the other hand. In such a situation, Morgan Stanley may also have a conflict in the allocation
of its own resources to the portfolio investment. Furthermore, certain Affiliated Investment Accounts will be focused primarily
on investing in other funds which may have strategies that overlap and/or directly conflict and compete with a Fund.
In addition, certain investment professionals who are involved in a Fund’s
activities remain responsible for the investment activities of other Affiliated Investment Accounts managed by the investment adviser
and its affiliates, and they will devote time to the management of such investments and other newly created Affiliated Investment
Accounts (whether in the form of funds, separate accounts or other vehicles), as well as their own investments. In addition, in
connection with the management of investments for other Affiliated Investment Accounts, members of Morgan Stanley and its affiliates
may serve on the boards of directors of or advise companies which may compete with a Fund’s portfolio investments. Moreover,
these Affiliated Investment Accounts managed by Morgan Stanley and its affiliates may pursue investment opportunities that may
also be suitable for a Fund.
It should be noted that Morgan Stanley may, directly or indirectly, make
large investments in certain of its Affiliated Investment Accounts, and accordingly Morgan Stanley’s investment in a Fund
may not be a determining factor in the outcome of any of the foregoing conflicts. Nothing herein restricts or in any way limits
the activities of Morgan Stanley, including its ability to buy or sell interests in, or provide financing to, equity and/or debt
instruments, funds or portfolio companies, for its own accounts or for the accounts of Affiliated Investment Accounts or other
investment funds or clients in accordance with applicable law.
Different clients of the investment adviser, including a Fund, may invest
in different classes of securities of the same issuer, depending on the respective clients’ investment objectives and policies.
As a result, the investment adviser and its affiliates, at times, will seek to satisfy fiduciary obligations to certain clients
owning one class of securities of a particular issuer by pursuing or enforcing rights on behalf of those clients with respect to
such class of securities, and those activities may have an adverse effect on another client which owns a different class of securities
of such issuer. For example, if one client holds debt securities of an issuer and another client holds equity securities of the
same issuer, if the issuer experiences financial or operational challenges, the investment adviser and its affiliates may seek
a liquidation of the issuer on behalf of the client that holds the debt securities, whereas the client holding the equity securities
may benefit from a reorganization of the issuer. Thus, in such situations, the actions taken by the investment adviser or its affiliates
on behalf of one client can negatively impact securities held by another client. These conflicts also exist as between the investment
adviser’s clients, including the Funds, and the Affiliated Investment Accounts managed by Morgan Stanley.
The investment adviser and its affiliates may give advice and recommend
securities to other clients which may differ from advice given to, or securities recommended or bought for, a Fund even though
such other clients’ investment objectives may be similar to those of the Fund.
The investment adviser and its affiliates manage long and short portfolios.
The simultaneous management of long and short portfolios creates conflicts of interest in portfolio management and trading in that
opposite directional positions may be taken in client accounts managed by the same investment team, and creates risks such as:
(i) the risk that short sale activity could adversely affect the market value of long positions in one or more portfolios (and
vice versa) and (ii) the risks associated with the trading desk receiving opposing orders in the same security simultaneously.
The investment adviser and its affiliates have adopted policies and procedures that are reasonably designed to mitigate these conflicts.
In certain circumstances, the investment adviser invest on behalf of itself in securities and other instruments that would be appropriate
for, held by, or may fall within the investment guidelines of its clients, including a Fund. At times, the investment adviser will
give advice or take action for its own accounts that differs from, conflicts with, or is adverse to advice given or action taken
for any client.
From time to time, conflicts also arise due to the fact that certain securities
or instruments maybe held in some client accounts, including a Fund, but not in others, or the client accounts may have different
levels of holdings in certain securities or instruments, and because the accounts pay different levels of fees
to the investment adviser. In addition, at times an investment adviser investment team will give advice or take action with respect
to the investments of one or more clients that is not given or taken with respect to other clients with similar investment programs,
objectives, and strategies. Accordingly, clients with similar strategies will not always hold the same securities or instruments
or achieve the same performance. The investment adviser’s investment teams also advise clients with conflicting programs,
objectives or strategies. These conflicts also exist as between the investment adviser’s clients, including the Funds, and
the Affiliated Investment Accounts managed by Morgan Stanley.
The investment adviser maintains separate trading desks by investment
team and generally based on asset class, including two trading desks trading equity securities. These trading desks operate independently
of one another. The two equity trading desks do not share information. The separate equity trading desks may result in one desk
competing against the other desk when implementing buy and sell transactions, possibly causing certain accounts to pay more or
receive less for a security than other accounts. In addition, Morgan Stanley and its affiliates maintain separate trading desks
that operate independently of each other and do not share information with the investment adviser. The Morgan Stanley and affiliate
trading desks may compete against the investment adviser trading desks when implementing buy and sell transactions, possibly causing
certain Affiliated Investment Accounts to pay more or receive less for a security than other Affiliated Investment Accounts.
Payments to Broker-Dealers
and Other Financial Intermediaries. The investment adviser and/or EVD may pay compensation, out of their own funds and not
as an expense of the Funds, to certain financial intermediaries (which may include affiliates of the investment adviser and EVD),
including recordkeepers and administrators of various deferred compensation plans, in connection with the sale, distribution, marketing
and retention of shares of the Funds and/or shareholder servicing. For example, the investment adviser or EVD may pay additional
compensation to a financial intermediary for, among other things, promoting the sale and distribution of Fund shares, providing
access to various programs, mutual fund platforms or preferred or recommended mutual fund lists that may be offered by a financial
intermediary, granting EVD access to a financial intermediary’s financial advisors and consultants, providing assistance
in the ongoing education and training of a financial intermediary’s financial personnel, furnishing marketing support, maintaining
share balances and/or for sub-accounting, recordkeeping, administrative, shareholder or transaction processing services. Such payments
are in addition to any distribution fees, shareholder servicing fees and/or transfer agency fees that may be payable by the Funds.
The additional payments may be based on various factors, including level of sales (based on gross or net sales or some specified
minimum sales or some other similar criteria related to sales of the Funds and/or some or all other Eaton Vance funds), amount
of assets invested by the financial intermediary’s customers (which could include current or aged assets of the Funds and/or
some or all other Eaton Vance funds), a Fund’s advisory fee, some other agreed upon amount or other measures as determined
from time to time by the investment adviser and/or EVD. The amount of these payments may be different for different financial intermediaries.
The prospect of receiving, or the receipt of, additional compensation,
as described above, by financial intermediaries may provide such financial intermediaries and their financial advisors and other
salespersons with an incentive to favor sales of shares of the Funds over other investment options with respect to which these
financial intermediaries do not receive additional compensation (or receives lower levels of additional compensation). These payment
arrangements, however, will not change the price that an investor pays for shares of the Funds or the amount that the Funds receive
to invest on behalf of an investor. Investors may wish to take such payment arrangements into account when considering and evaluating
any recommendations relating to Fund shares and should review carefully any disclosures provided by financial intermediaries as
to their compensation.
Morgan Stanley Trading
and Principal Investing Activities. Notwithstanding anything to the contrary herein, Morgan Stanley will generally conduct
its sales and trading businesses, publish research and analysis, and render investment advice without regard for a Fund’s
holdings, although these activities could have an adverse impact on the value of one or more of the Fund’s investments, or
could cause Morgan Stanley to have an interest in one or more portfolio investments that is different from, and potentially adverse
to that of a Fund. Furthermore, from time to time, the investment adviser or its affiliates may invest “seed” capital
in a Fund, typically to enable the Fund to commence investment operations and/or achieve sufficient scale. The investment adviser
and its affiliates may hedge such seed capital exposure by investing in derivatives or other instruments expected to produce offsetting
exposure. Such hedging transactions, if any, would occur outside of a Fund.
Morgan Stanley’s sales and trading, financing and principal investing
businesses (whether or not specifically identified as such, and including Morgan Stanley’s trading and principal investing
businesses) will not be required to offer any investment opportunities to a Fund. These businesses may encompass, among other things,
principal trading activities as well as principal investing.
Morgan Stanley’s sales and trading, financing and principal investing
businesses have acquired or invested in, and in the future may acquire or invest in, minority and/or majority control positions
in equity or debt instruments of diverse public and/or private companies. Such activities may put Morgan Stanley in a
position to exercise contractual, voting or creditor rights, or management or other control with respect to securities or loans
of portfolio investments or other issuers, and in these instances Morgan Stanley may, in its discretion and subject to applicable
law, act to protect its own interests or interests of clients, and not a Fund’s interests.
Subject to the limitations of applicable law, a Fund may purchase from
or sell assets to, or make investments in, companies in which Morgan Stanley has or may acquire an interest, including as an owner,
creditor or counterparty.
Morgan Stanley’s
Investment Banking Activities. Morgan Stanley advises clients on a variety of mergers, acquisitions, restructuring, bankruptcy
and financing transactions. Morgan Stanley may act as an advisor to clients, including other investment funds that may compete
with a Fund and with respect to investments that a Fund may hold. Morgan Stanley may give advice and take action with respect to
any of its clients or proprietary accounts that may differ from the advice given, or may involve an action of a different timing
or nature than the action taken, by a Fund. Morgan Stanley may give advice and provide recommendations to persons competing with
a Fund and/or any of a Fund’s investments that are contrary to the Fund’s best interests and/or the best interests
of any of its investments.
Morgan Stanley could be engaged in financial advising, whether on the
buy-side or sell-side, or in financing or lending assignments that could result in Morgan Stanley’s determining in its discretion
or being required to act exclusively on behalf of one or more third parties, which could limit a Fund’s ability to transact
with respect to one or more existing or potential investments. Morgan Stanley may have relationships with third-party funds, companies
or investors who may have invested in or may look to invest in portfolio companies, and there could be conflicts between a Fund’s
best interests, on the one hand, and the interests of a Morgan Stanley client or counterparty, on the other hand.
To the extent that Morgan Stanley advises creditor or debtor companies
in the financial restructuring of companies either prior to or after filing for protection under Chapter 11 of the U.S. Bankruptcy
Code or similar laws in other jurisdictions, the investment adviser’s flexibility in making investments in such restructurings
on a Fund’s behalf may be limited. Morgan Stanley could provide investment banking services to competitors of portfolio companies,
as well as to private equity and/or private credit funds; such activities may present Morgan Stanley with a conflict of interest
vis-a-vis a Fund’s investment and may also result in a conflict in respect of the allocation of investment banking resources
to portfolio companies.
To the extent permitted by applicable law, Morgan Stanley may provide
a broad range of financial services to companies in which a Fund invests, including strategic and financial advisory services,
interim acquisition financing and other lending and underwriting or placement of securities, and Morgan Stanley generally will
be paid fees (that may include warrants or other securities) for such services. Morgan Stanley will not share any of the foregoing
interest, fees and other compensation received by it (including, for the avoidance of doubt, amounts received by the investment
adviser) with a Fund, and any advisory fees payable will not be reduced thereby.
Morgan Stanley may be engaged to act as a financial advisor to a company
in connection with the sale of such company, or subsidiaries or divisions thereof, may represent potential buyers of businesses
through its mergers and acquisition activities and may provide lending and other related financing services in connection with
such transactions. Morgan Stanley’s compensation for such activities is usually based upon realized consideration and is
usually contingent, in substantial part, upon the closing of the transaction. Under these circumstances, a Fund may be precluded
from participating in a transaction with or relating to the company being sold or participating in any financing activity related
to merger or acquisition.
To meet applicable regulatory requirements, there are periods when the
investment adviser will not engage in certain types of transactions in the securities of companies for which a broker-dealer affiliated
with Morgan Stanley is performing investment banking services. Fund shareholders will not receive notice of such instances. In
particular, when a broker-dealer affiliated with Morgan Stanley is engaged in an underwriting or other distribution of securities
of a company, the investment adviser may be prohibited from purchasing such securities on behalf of a Fund. In addition, under
certain circumstances, the investment adviser generally will not initiate transactions in the securities of companies with respect
to which affiliates of the investment adviser may have controlling interests or are affiliated.
The investment adviser believes that the nature and range of clients to
whom Morgan Stanley and its subsidiaries render investment banking and other services is such that it would be inadvisable to exclude
these companies from the Fund’s portfolio.
Morgan Stanley’s
Marketing Activities. Morgan Stanley is engaged in the business of underwriting, syndicating, brokering, administering,
servicing, arranging and advising on the distribution of a wide variety of securities and other investments in which a Fund may
invest. Subject to the restrictions of the 1940 Act, including Sections 10(f) and 17(e) thereof, a Fund may invest in transactions
in which Morgan Stanley acts as underwriter, placement agent, syndicator, broker, administrative agent, servicer, advisor, arranger
or structuring agent and receives fees or other compensation from the sponsors of such products or securities. Any fees earned
by Morgan Stanley in such capacity will not be shared with the investment adviser or the Funds. Certain conflicts of interest, in addition to the receipt of
fees or other compensation, would be inherent in these transactions. Moreover, the interests of one of Morgan Stanley’s clients
with respect to an issuer of securities in which a Fund has an investment may be adverse to the investment adviser’s or a
Fund’s best interests. In conducting the foregoing activities, Morgan Stanley will be acting for its other clients and will
have no obligation to act in the investment adviser’s or a Fund’s best interests.
Client Relationships.
Morgan Stanley has existing and potential relationships with a significant number of corporations, institutions and individuals.
In providing services to its clients, Morgan Stanley may face conflicts of interest with respect to activities recommended to or
performed for such clients, on the one hand, and a Fund, its shareholders or the entities in which the Fund invests, on the other
hand. In addition, these client relationships may present conflicts of interest in determining whether to offer certain investment
opportunities to a Fund.
In acting as principal or in providing advisory and other services to
its other clients, Morgan Stanley may engage in or recommend activities with respect to a particular matter that conflict with
or are different from activities engaged in or recommended by the investment adviser on a Fund’s behalf.
Principal Investments.
To the extent permitted by applicable law, there may be situations in which a Funds’ interests may conflict with the
interests of one or more general accounts of Morgan Stanley and its affiliates or accounts managed by Morgan Stanley or its affiliates.
This may occur because these accounts hold public and private debt and equity securities of many issuers which may be or become
portfolio companies, or from whom portfolio companies may be acquired.
Transactions with
Portfolio Companies of Affiliated Investment Accounts. The companies in which a Fund may invest may be counterparties to
or participants in agreements, transactions or other arrangements with portfolio companies or other entities of portfolio investments
of Affiliated Investment Accounts (for example, a company in which a Fund invests may retain a company in which an Affiliated Investment
Account invests to provide services or may acquire an asset from such company or vice versa). Certain of these agreements, transactions
and arrangements involve fees, servicing payments, rebates and/or other benefits to Morgan Stanley or its affiliates. For example,
portfolio entities may, including at the encouragement of Morgan Stanley, enter into agreements regarding group procurement and/or
vendor discounts. Morgan Stanley and its affiliates may also participate in these agreements and may realize better pricing or
discounts as a result of the participation of portfolio entities. To the extent permitted by applicable law, certain of these agreements
may provide for commissions or similar payments and/or discounts or rebates to be paid to a portfolio entity of an Affiliated Investment
Account, and such payments or discounts or rebates may also be made directly to Morgan Stanley or its affiliates. Under these arrangements,
a particular portfolio company or other entity may benefit to a greater degree than the other participants, and the funds, investment
vehicles and accounts (which may or may not include a Fund) that own an interest in such entity will receive a greater relative
benefit from the arrangements than the Eaton Vance funds, investment vehicles or accounts that do not own an interest therein.
Fees and compensation received by portfolio companies of Affiliated Investment Accounts in relation to the foregoing will not be
shared with a Fund or offset advisory fees payable.
Investments in Portfolio
Investments of Other Funds. To the extent permitted by applicable law, when a Fund invests in certain companies or other
entities, other funds affiliated with the investment adviser may have made or may be making an investment in such companies or
other entities. Other funds that have been or may be managed by the investment adviser may invest in the companies or other entities
in which a Fund has made an investment. Under such circumstances, a Fund and such other funds may have conflicts of interest (e.g.,
over the terms, exit strategies and related matters, including the exercise of remedies of their respective investments). If the
interests held by a Fund are different from (or take priority over) those held by such other funds, the investment adviser may
be required to make a selection at the time of conflicts between the interests held by such other funds and the interests held
by a Fund.
Allocation of Expenses.
Expenses may be incurred that are attributable to a Fund and one or more other Affiliated Investment Accounts (including in connection
with issuers in which a Fund and such other Affiliated Investment Accounts have overlapping investments). The allocation of such
expenses among such entities raises potential conflicts of interest. The investment adviser and its affiliates intend to allocate
such common expenses among a Fund and any such other Affiliated Investment Accounts on a pro rata basis or in such other manner
as the investment adviser deems to be fair and equitable or in such other manner as may be required by applicable law.
Temporary Investments.
To more efficiently invest short-term cash balances held by a Fund, the investment adviser may invest such balances on an
overnight “sweep” basis in shares of one or more money market funds or other short-term vehicles. It is anticipated
that the investment adviser to these money market funds or other short-term vehicles may be the investment adviser (or an affiliate)
to the extent permitted by applicable law, including Rule 12d1-1 under the 1940 Act. The Funds currently invests in Eaton Vance
Cash Reserves Fund, LLC (Cash Reserves Fund), an affiliated investment company managed by Eaton Vance, for this purpose. Eaton
Vance does not currently receive a fee for advisory services provided to Cash Reserves Fund.
Transactions with
Affiliates. The investment adviser and any investment sub-adviser might purchase securities from underwriters or placement
agents in which a Morgan Stanley affiliate is a member of a syndicate or selling group, as a result of which an affiliate might
benefit from the purchase through receipt of a fee or otherwise. Neither the investment adviser nor any investment sub-adviser
will purchase securities on behalf of a Fund from an affiliate that is acting as a manager of a syndicate or selling group. Purchases
by the investment adviser on behalf of a Fund from an affiliate acting as a placement agent must meet the requirements of applicable
law. Furthermore, Morgan Stanley may face conflicts of interest when the Funds use service providers affiliated with Morgan Stanley
because Morgan Stanley receives greater overall fees when they are used.
General Process for
Potential Conflicts. All of the transactions described above involve the potential for conflicts of interest between the
investment adviser, related persons of the investment adviser and/or their clients. The Advisers Act, the 1940 Act and ERISA impose
certain requirements designed to decrease the possibility of conflicts of interest between an investment adviser and its clients.
In some cases, transactions may be permitted subject to fulfillment of certain conditions. Certain other transactions may be prohibited.
In addition, the investment adviser has instituted policies and procedures designed to prevent conflicts of interest from arising
and, when they do arise, to ensure that it effects transactions for clients in a manner that is consistent with its fiduciary duty
to its clients and in accordance with applicable law. The investment adviser seeks to ensure that potential or actual conflicts
of interest are appropriately resolved taking into consideration the overriding best interests of the client.
EATON VANCE FOCUSED GLOBAL OPPORTUNITIES FUND
EATON VANCE INTERNATIONAL SMALL-CAP FUND
Supplement to Prospectus
dated April 1, 2020
EATON VANCE WORLDWIDE HEALTH SCIENCES FUND
Supplement to Prospectus
dated January 1, 2021
EATON VANCE GLOBAL INCOME BUILDER FUND
EATON VANCE GLOBAL INCOME BUILDER NEXTSHARES
EATON VANCE GLOBAL SMALL-CAP EQUITY FUND
EATON VANCE INCOME FUND OF BOSTON
EATON VANCE MULTI-ASSET CREDIT FUND
EATON VANCE SHORT DURATION HIGH INCOME FUND
Supplement to Prospectuses
dated March 1, 2021
1. The following replaces corresponding
disclosure under “Management.” in “Management and Organization”:
Each Fund’s investment adviser is Eaton Vance Management (“Eaton
Vance”) and, if applicable, the Portfolio’s investment adviser is Boston Management and Research (“BMR”).
Each of Eaton Vance and BMR have offices at Two International Place, Boston, MA 02110. Eaton Vance and BMR and their predecessor
organizations have been managing assets since 1924 and managing mutual funds since 1931. Prior to March 1, 2021, Eaton Vance was
a wholly owned subsidiary and BMR was an indirect subsidiary of Eaton Vance Corp. (“EVC”).
On March 1, 2021, Morgan Stanley acquired EVC (the “Transaction”)
and Eaton Vance and BMR became indirect, wholly-owned subsidiaries of Morgan Stanley. In connection with the Transaction,
each Fund and the Portfolio entered into a new investment advisory agreement with its adviser and each Fund’s and the Portfolio’s
adviser entered into a new investment sub-advisory agreement with EVAIL (as defined below), as applicable. Each such agreement
was approved by Fund shareholders or Portfolio interest holders, as applicable, prior to the consummation of the Transaction and
was effective upon its closing.
Morgan Stanley (NYSE: MS), whose principal offices are at 1585 Broadway
Avenue, New York, New York 10036, is a preeminent global financial services firm engaged in securities trading and brokerage
activities, as well as providing investment banking, research and analysis, financing and financial advisory services. As
of December 31, 2020, after giving effect to the Transaction as described above, Morgan Stanley’s asset management operations
had aggregate assets under management of approximately $1.4 trillion.
Each Fund is allocated its pro rata share of the advisory fee paid by
the Portfolio or Portfolios in which it invests, as applicable. Effective March 1, 2021, any fee reduction agreement previously
applicable to a Fund or Portfolio, as applicable, was incorporated into its new investment advisory agreement with its investment
adviser and/or the new investment sub-advisory agreement with EVAIL, as applicable.
Pursuant to investment sub-advisory agreements, the adviser of each Fund
and the Portfolio, as applicable, has delegated the investment management, or a portion thereof, of the Fund or Portfolio to Eaton
Vance Advisers International Ltd. (“EVAIL”), 125 Old Broad Street, London, EC2N 1AR, United Kingdom, a registered investment
adviser. The Fund’s or Portfolio’s adviser pays EVAIL a portion of its advisory fee for sub-advisory services provided
to the Fund or Portfolio, as applicable. On March 1, 2021, upon the closing of the Transaction, EVAIL became an indirect wholly
owned subsidiary of Morgan Stanley. Prior to March 1, 2021, EVAIL was an indirect wholly-owned subsidiary of EVC.
2. The following replaces the
first paragraph under “Payments to Financial Intermediaries.” in “Purchasing Shares” for all Funds except
Eaton Vance Global Income Builder NextShares:
Payments to Financial
Intermediaries. In addition to payments disclosed under “Sales Charges” below, the principal underwriter, out
of its own resources, may make cash payments to certain financial intermediaries (which may include affiliates of the principal
underwriter and investment adviser) who provide marketing support, transaction processing and/or administrative services and, in
some cases, include some or all Eaton Vance funds in preferred or specialized selling programs. Payments made by the principal
underwriter to a financial intermediary may be significant and are typically in the form of fees based on Fund sales, assets, transactions
processed and/or accounts attributable to that financial intermediary. Financial intermediaries also may receive amounts from the
principal underwriter in connection with educational or due diligence meetings that include information concerning Eaton Vance
funds. The principal underwriter may pay or allow other promotional incentives or payments to financial intermediaries to the extent
permitted by applicable laws and regulations.
3. The following replaces the
fourth paragraph under “Distribution” for Eaton Vance Global Income Builder NextShares:
The investment adviser (or one of its affiliates) may make payments to
financial intermediaries (which may include affiliates of the investment adviser) related to marketing activities and presentations,
educational training programs, conferences, the development of technology platforms and reporting systems, or for making shares
of the Fund available to their customers. Such payments, which may be significant to the financial intermediary, are not made by
the Fund. Rather, such payments are made by the investment adviser (or one of its affiliates) from its own resources. A financial
intermediary may make decisions about which investment options it recommends or makes available, or the level of services provided, to its customers based on the payments it is eligible
to receive. Therefore, such payments to a financial intermediary create conflicts of interest between such intermediary and its
customers and may cause the intermediary to recommend the Fund over another investment.
4. The following replaces “Fund
Purchases through Edward D. Jones & Co., L.P. (“Edward Jones”)” under “Appendix A – Financial
Intermediary Sales Charge Variations” for all Funds except Eaton Vance Focused Global Opportunities Fund and Eaton Vance
Global Income Builder NextShares:
Policies Regarding Transactions Through Edward
D. Jones & Co., L.P. (“Edward Jones”)
The following information has been provided by Edward Jones:
Effective on or after March 1, 2021, the following information supersedes
prior information with respect to transactions and positions held in fund shares through an Edward Jones system. Clients of Edward
Jones (also referred to as “shareholders”) purchasing fund shares on the Edward Jones commission and fee-based platforms
are eligible only for the following sales charge discounts (also referred to as “breakpoints”) and waivers, which can
differ from discounts and waivers described elsewhere in the mutual fund prospectus or statement of additional information (“SAI”)
or through another broker-dealer. In all instances, it is the shareholder's responsibility to inform Edward Jones at the time of
purchase of any relationship, holdings of fund family or other facts qualifying the purchaser for discounts or waivers. Edward
Jones can ask for documentation from the shareholder of such circumstance. Shareholders should contact Edward Jones if they have
questions regarding their eligibility for these discounts and waivers.
Breakpoints
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·
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Breakpoint pricing, otherwise known as volume pricing, at dollar thresholds as described in the prospectus.
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Rights of Accumulation (“ROA”)
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·
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The applicable sales charge on a purchase of Class A shares is determined by taking into account all share classes (except
certain money market funds and any assets held in group retirement plans) of the mutual fund family held by the shareholder or
in an account grouped by Edward Jones with other accounts for the purpose of providing certain pricing considerations (“pricing
groups”). If grouping assets as a shareholder, this includes all share classes held on the Edward Jones platform and/or held
on another platform. The inclusion of eligible fund family assets in the ROA calculation is dependent on the shareholder notifying
Edward Jones of such assets at the time of calculation. Money market funds are included only if such shares were sold with a sales
charge at the time of purchase or acquired in exchange for shares purchased with a sales charge.
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·
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The employer maintaining a SEP IRA plan and/or SIMPLE IRA plan may elect to establish or change ROA for the IRA accounts associated
with the plan to a plan-level grouping as opposed to including all share classes at a shareholder or pricing group level.
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·
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ROA is determined by calculating the higher of cost minus redemptions or market value (current shares x NAV).
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Letter of Intent (“LOI”)
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·
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Through a LOI, shareholders can receive the sales charge and breakpoint discounts for purchases shareholders intend to make
over a 13-month period from the date Edward Jones receives the LOI. The LOI is determined by calculating the higher of cost or
market value of qualifying holdings at LOI initiation in combination with the value that the shareholder intends to buy over a
13-month period to calculate the front-end sales charge and any breakpoint discounts. Each purchase the shareholder makes during
that 13-month period will receive the sales charge and breakpoint discount that applies to the total amount. If during the 13-month
period the shareholder redeems any of the shares purchased pursuant to a LOI, the value of the redeemed shares will not be included
for purposes of satisfying the LOI. The inclusion of eligible fund family assets in the LOI calculation is dependent on the shareholder
notifying Edward Jones of such assets at the time of calculation. Purchases made before the LOI is received by Edward Jones are
not adjusted under the LOI and will not reduce the sales charge previously paid. Sales charges will be adjusted if LOI is not met.
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·
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If the employer maintaining a SEP IRA plan and/or SIMPLE IRA plan has elected to establish or change ROA for the IRA accounts
associated with the plan to a plan-level grouping, LOIs will also be at the plan-level and may only be established by the employer.
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Front-end Sales Charge Waivers
Sales charges are waived for the following shareholders and
in the following situations:
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·
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Associates of Edward Jones and its affiliates and their family members who are in the same pricing group (as determined by
Edward Jones under its policies and procedures) as the associate. This waiver will continue for the remainder of the associate's
life if the associate retires from Edward Jones in good-standing and remains in good standing pursuant to Edward Jones' policies
and procedures.
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·
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Shares purchased in an Edward Jones fee-based program.
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·
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Shares purchased through reinvestment of capital gains distributions and dividend reinvestment.
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·
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Shares purchased from the proceeds of redeemed shares of the same fund family so long as the following conditions are met:
1) the proceeds are from the sale of shares within 60 days of the purchase, and 2) the sale and purchase are made in the same share
class and the same account or the purchase is made in an individual retirement account with proceeds from liquidations in a non-retirement
account.
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·
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Shares exchanged into Class A shares from another share class so long as the exchange is into the same fund and was initiated
at the discretion of Edward Jones. Edward Jones is responsible for any remaining Contingent Deferred Sales Charge (“CDSC”)
due to the fund company or its affiliate, if applicable. Any future purchases are subject to the applicable sales charge as disclosed
in the prospectus.
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·
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Exchanges from Class C shares to Class A shares of the same fund, generally, in the 84th month following the anniversary of
the purchase date or earlier at the discretion of Edward Jones.
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CDSC Waivers
If the shareholder purchases shares that are subject to a CDSC
and those shares are redeemed before the CDSC is expired, the shareholder is responsible to pay the CDSC except in the following
conditions:
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The death or disability of the shareholder.
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Systematic withdrawals with up to 10% per year of the account value.
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Return of excess contributions from an Individual Retirement Account (IRA).
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Shares sold as part of a required minimum distribution for IRA and retirement accounts if the redemption is taken in or after
the year the shareholder reaches qualified age based on applicable IRS regulations.
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Shares sold to pay Edward Jones fees or costs in such cases where the transaction is initiated by Edward Jones. Edward Jones
is responsible for any remaining CDSC due to the fund company or its affiliate, if applicable.
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·
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Shares exchanged in an Edward Jones fee-based program. Edward Jones is responsible for any remaining CDSC due to the fund company
or its affiliate, if applicable.
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·
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Shares acquired through NAV reinstatement.
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·
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Shares redeemed at the discretion of Edward Jones for Minimum Balances as described below.
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******************************************************************************
Other Important Information Regarding Transactions Through Edward Jones
Minimum Purchase Amounts
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Initial purchase minimum: $250
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Subsequent purchase minimum: none
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Minimum Balances
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Edward Jones has the right to redeem at its discretion fund holdings with a balance of $250 or less. The following are examples
of accounts that are not included in this policy:
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A fee-based account held on an Edward Jones platform
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A 529 account held on an Edward Jones platform
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·
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An account with an active systematic investment plan or LOI
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Exchanging Share Classes
At any time it deems necessary, Edward Jones has the authority to exchange
at NAV a shareholder's holdings in a fund to Class A shares of the same fund. Edward Jones is responsible for any remaining CDSC
due to the fund company or its affiliate, if applicable. Any future purchases are subject to the applicable sales charge as disclosed
in the prospectus.
March 1, 2021
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37969 3.1.21
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EATON VANCE FOCUSED GLOBAL OPPORTUNITIES FUND
EATON VANCE INTERNATIONAL SMALL-CAP FUND
Supplement to Statement
of Additional Information (“SAI”) dated April 1, 2020
EATON VANCE WORLDWIDE HEALTH SCIENCES FUND
Supplement to SAI dated January 1, 2021
EATON VANCE GLOBAL INCOME BUILDER FUND
EATON VANCE GLOBAL INCOME BUILDER NEXTSHARES
EATON VANCE GLOBAL SMALL-CAP EQUITY FUND
EATON VANCE INCOME FUND OF BOSTON
EATON VANCE MULTI-ASSET CREDIT FUND
EATON VANCE SHORT DURATION HIGH INCOME FUND
Supplement to SAIs
dated March 1, 2021
1. The following replaces the
first paragraph under “Fund Management.” in “Management and Organization”:
Fund Management.
The Trustees of the Trust are responsible for the overall management and supervision of the affairs
of the Trust. If applicable, the Trustees of the Portfolio are responsible for the overall management and supervision of the Portfolio.
The Board members and officers of the Trust and the Portfolio are listed below. Except as indicated, each individual has held the
office shown or other offices in the same company for the last five years. Board members hold indefinite terms of office. Each
Trustee holds office until his or her successor is elected and qualified, subject to a prior death, resignation, retirement, disqualification
or removal. Under the terms of each Funds’ and Portfolio’s, if applicable, current Trustee retirement policy,
an Independent Trustee must retire and resign as a Trustee on the earlier of: (i) the first day of July following his or her 74th
birthday; or (ii), with limited exception, December 31st of the 20th year in which he or she has served as a Trustee. However,
if such retirement and resignation would cause each Fund or Portfolio to be out of compliance with Section 16 of the 1940
Act or any other regulations or guidance of the SEC, then such retirement and resignation will not become effective until such
time as action has been taken for each Fund or Portfolio to be in compliance therewith. The “noninterested Trustees”
consist of those Trustees who are not “interested persons” of the Trust and the Portfolio, as that term is defined
under the 1940 Act. The business address of each Board member and officer is Two International Place, Boston, Massachusetts 02110.
As used in this SAI, “EVC” refers to Eaton Vance Corp., “EV” refers to Eaton Vance, Inc., “Eaton
Vance” refers to Eaton Vance Management and “EVD” refers to Eaton Vance Distributors, Inc. (see “Principal
Underwriter” under “Other Service Providers”). EV is the trustee of each of Eaton Vance and BMR. Effective March
1, 2021, each of Eaton Vance, BMR, EVD and EV are indirect wholly-owned subsidiaries of Morgan Stanley. Each officer affiliated
with Eaton Vance may hold a position with other Eaton Vance affiliates that is comparable to his or her position with Eaton Vance
listed below.
2. The following replaces the
Thomas E. Faust Jr. row in the Trustees table and in his biographical narrative in “Management and Organization”:
THOMAS E. FAUST JR.
1958
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Trustee
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Since 2007
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Chairman of Morgan Stanley Investment Management, Inc. (MSIM), Director and President of EV, Chief Executive Officer and President of Eaton Vance and BMR, and Director of EVD. Formerly, Chairman, Chief Executive Officer and President of EVC. Trustee and/or officer of 141 registered investment companies. Mr. Faust is an interested person because of his positions with MSIM, BMR, Eaton Vance, EVD and EV, which are affiliates of the Trust and the Portfolio, and his former position with EVC, which was an affiliate of the Trust and Portfolio prior to March 1, 2021.
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141
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Formerly, Director of EVC (2007-2021) and Hexavest Inc. (2012-2021) (investment management firm).
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Thomas E. Faust
Jr. Mr. Faust has served as a member of the Eaton Vance Fund Boards since 2007. Effective March 1, 2021, he is Chairman
of MSIM. He is also Director and President of EV, Chief Executive Officer and President of Eaton Vance and BMR, and Director of
EVD. Mr. Faust previously served as Chairman and Chief Executive Officer of EVC from 2007 through March 1, 2021 and as President
of EVC from 2006 through March 1, 2021. Mr. Faust served as a Director of Hexavest Inc. from 2012-2021. From 2016 through 2019,
Mr. Faust served as a Director of SigFig Wealth Management LLC. Mr. Faust previously served as an equity analyst, portfolio manager,
Director of Equity Research and Management and Chief Investment Officer of Eaton Vance from 1985-2007. He holds B.S. degrees in
Mechanical Engineering and Economics from the Massachusetts Institute of Technology and an MBA from Harvard Business School. Mr.
Faust has been a Chartered Financial Analyst since 1988. He is a trustee and member of the executive committee of the Boston Symphony
Orchestra, Inc. and trustee emeritus of Wellesley College.
3. The following is added as
the first paragraph under “Investment Advisory Services” in “Investment Advisory and Administrative Services”:
As described in the Prospectus, upon the closing of the transaction by
which Morgan Stanley acquired EVC (the “Transaction”), each Fund and each Portfolio entered into a new investment advisory
agreement or investment advisory and administrative agreement with Eaton Vance or BMR, as applicable, and Eaton Vance or BMR, as
applicable, entered into a new investment sub-advisory agreement with the Fund’s or Portfolio’s sub-adviser, as applicable.
4. The following replaces the
last paragraph under “Investment Advisory Services.” in “Investment Advisory and Administrative Services”:
Each Investment Advisory Agreement or Investment Advisory and Administrative
Agreement and Investment Sub-Advisory Agreement with the investment adviser or sub-adviser continues in effect through and including
the second anniversary of its execution and shall continue in full force and effect indefinitely thereafter, but only so long as
such continuance after such second anniversary is specifically approved at least annually (i) by the vote of a majority of the
noninterested Trustees of the Trust, in the case of a Fund, or a Portfolio, if applicable, cast in person at a meeting specifically
called for the purpose of voting on such approval and (ii) by the Board of the Trust, in the case of a Fund, or a Portfolio, if
applicable, or by vote of a majority of the outstanding voting securities of the Portfolio or Fund. Each Agreement may be terminated
at any time without penalty on sixty (60) days’ written notice by either party, or by vote of the majority of the outstanding
voting securities of the Portfolio or Fund, and each Agreement will terminate automatically in the event of its assignment. Each
Agreement provides that the investment adviser or sub-adviser may render services to others. Each Agreement also provides that
the investment adviser or sub-adviser shall not be liable for any loss incurred in connection with the performance of its duties,
or action taken or omitted under the Agreement, in the absence of willful misfeasance, bad faith, gross negligence or reckless
disregard of its obligations and duties thereunder, or for any losses sustained in the acquisition, holding or disposition of any
security or other investment. Each Agreement is not intended to, and does not, confer upon any person not a party to it any right,
benefit or remedy of any nature, except that the new sub-advisory agreements with EVAIL (as described above) state that each Fund
is a third party beneficiary of such agreement.
5. The following replaces “Information
About BMR and Eaton Vance.” in “Investment Advisory and Administrative Services”:
Information About
BMR and Eaton Vance. BMR and Eaton Vance are business trusts organized under the laws of the Commonwealth of Massachusetts.
EV serves as trustee of BMR and Eaton Vance. As described in the Prospectus, following the closing of the Transaction on March
1, 2021, EV, Eaton Vance and BMR became indirect wholly-owned subsidiaries of Morgan Stanley (NYSE: MS), a preeminent global financial
services firm engaged in securities trading and brokerage activities, as well as providing investment banking, research and analysis,
financing and financial advisory services.
Prior to March 1, 2021, EV and Eaton Vance were wholly-owned subsidiaries
of EVC, a Maryland corporation and publicly-held holding company and BMR was an indirect wholly owned subsidiary of EVC. EVC through
its subsidiaries and affiliates engaged primarily in investment management, administration and marketing activities. The Directors
of EVC were Thomas E. Faust Jr., Ann E. Berman, Leo I. Higdon, Jr., Paula A. Johnson, Brian D. Langstraat, Dorothy E. Puhy, Winthrop
H. Smith, Jr. and Richard A. Spillane, Jr. All shares of the outstanding Voting Common Stock of EVC were deposited in a Voting
Trust, the Voting Trustees of which were Mr. Faust, Paul W. Bouchey, Craig R. Brandon, Daniel C. Cataldo, Michael A. Cirami, Cynthia
J. Clemson, James H. Evans, Maureen A. Gemma, Laurie G. Hylton, Mr. Langstraat, Thomas Lee, Frederick S. Marius, David C. McCabe,
Edward J. Perkin, Lewis R. Piantedosi, Charles B. Reed, Craig P. Russ, Thomas C. Seto, John L. Shea, Eric A. Stein, John H. Streur,
Andrew N. Sveen, Payson F. Swaffield, R. Kelly Williams and Matthew J. Witkos (all of whom are or were officers of Eaton Vance
or its affiliates). The Voting Trustees had unrestricted voting rights for the election of Directors of EVC. Prior to March 1,
2021, all of the outstanding voting trust receipts issued under said Voting Trust were owned by certain of the officers of BMR
and Eaton Vance who may also have been officers, or officers and Directors of EVC and EV. As indicated under “Management
and Organization,” all of the officers of the Trust (as well as Mr. Faust who is also a Trustee) are employees of Eaton Vance
and/or BMR.
6. The following replaces “Information
About EVAIL.” in “Investment Advisory and Administrative Services”:
Information About
EVAIL. EVAIL provides investment advice to institutional clients and pooled investment vehicles. As described in the Prospectus,
following the closing of the Transaction on March 1, 2021, EVAIL became an indirect, wholly-owned subsidiary of Morgan Stanley.
Prior to March 1, 2021, EVAIL was an indirect wholly-owned subsidiary of EVC. EVAIL was originally organized in 2015.
7. The following replaces “Compensation
Structure for Eaton Vance, BMR and EVAIL.” and “Method to Determine Compensation.” under “Portfolio Managers.”
in “Investment Advisory and Administrative Services”:
Compensation Structure
for Eaton Vance, BMR and EVAIL. Compensation of the investment adviser's and sub-adviser's (collectively as used herein,
the “investment adviser”) portfolio managers and other investment professionals has the following primary components:
(1) a base salary, (2) an annual cash bonus, and (3) annual non-cash compensation consisting of restricted shares of Morgan Stanley
stock that are subject to a fixed vesting and distribution schedule. The investment adviser’s investment professionals also
receive certain retirement, insurance and other benefits that are broadly available to the investment adviser’s employees.
Compensation of the investment adviser’s investment professionals is reviewed primarily on an annual basis. Cash bonuses, stock-based
compensation awards, and adjustments in base salary are typically paid or put into effect at or shortly after the December 31st
fiscal year end of Morgan Stanley.
Method to Determine
Compensation. The investment adviser compensates its portfolio managers based primarily on the scale and complexity
of their portfolio responsibilities and the total return performance of managed funds and accounts versus the benchmark(s) stated
in the prospectus, as well as an appropriate peer group (as described below). In addition to rankings within peer groups of funds
on the basis of absolute performance, consideration may also be given to relative risk-adjusted performance. Risk-adjusted performance
measures include, but are not limited to, the Sharpe ratio, which uses standard deviation and excess return to determine reward
per unit of risk. Performance is normally based on periods ending on the September 30th preceding fiscal year end. Fund performance
is normally evaluated primarily versus peer groups of funds as determined by Lipper Inc. and/or Morningstar, Inc. When a fund’s
peer group as determined by Lipper or Morningstar is deemed by the investment adviser’s management not to provide a fair
comparison, performance may instead be evaluated primarily against a custom peer group or market index. In evaluating the performance
of a fund and its manager, primary emphasis is normally placed on three-year performance, with secondary consideration of performance
over longer and shorter periods. For funds that are tax-managed or otherwise have an objective of after-tax returns, performance
is measured net of taxes. For other funds, performance is evaluated on a pre-tax basis. For funds with an investment objective
other than total return (such as current income), consideration will also be given to the fund’s success in achieving its
objective. For managers responsible for multiple funds and accounts, investment performance is evaluated on an aggregate basis,
based on averages or weighted averages among managed funds and accounts. Funds and accounts that have performance-based advisory
fees are not accorded disproportionate weightings in measuring aggregate portfolio manager performance.
The compensation of portfolio managers with other job responsibilities (such
as heading an investment group or providing analytical support to other portfolios) will include consideration of the scope of
such responsibilities and the managers’ performance in meeting them.
The investment adviser seeks to compensate portfolio managers commensurate
with their responsibilities and performance, and competitive with other firms within the investment management industry. The investment
adviser participates in investment-industry compensation surveys and utilizes survey data as a factor in determining salary, bonus
and stock-based compensation levels for portfolio managers and other investment professionals. Salaries, bonuses and stock-based
compensation are also influenced by the operating performance of the investment adviser and Morgan Stanley. The overall annual
cash bonus pool is generally based on a substantially fixed percentage of pre-bonus adjusted operating income. While the salaries
of the investment adviser’s portfolio managers are comparatively fixed, cash bonuses and stock-based compensation may fluctuate
significantly from year to year, based on changes in manager performance and other factors as described herein. For a high performing
portfolio manager, cash bonuses and stock-based compensation may represent a substantial portion of total compensation.
8. The following replaces the
first two paragraphs in “Other Service Providers” for all Funds except Eaton Vance Global Income Builder NextShares:
Principal Underwriter.
Eaton Vance Distributors, Inc. (“EVD”), Two International Place, Boston, MA 02110 is
the principal underwriter of each Fund. The principal underwriter acts as principal in selling shares under a Distribution Agreement
with the Trust. The expenses of printing copies of prospectuses used to offer shares and other selling literature and of advertising
are borne by the principal underwriter. The fees and expenses of qualifying and registering and maintaining qualifications and
registrations of a Fund and its shares under federal and state securities laws are borne by the Fund. The Distribution Agreement
is renewable annually by the members of the Board (including a majority of the noninterested Trustees who have no direct or indirect
financial interest in the operation of the Distribution Agreement or any applicable Distribution Plan), may be terminated on sixty
days’ notice either by such Trustees or by vote of a majority of the outstanding Fund shares or on six months’ notice
by the principal underwriter and is automatically terminated upon assignment. The principal underwriter distributes shares on a
“best efforts” basis under which it is required to take and pay for only such shares as may be sold. Effective March
1, 2021, EVD is an indirect wholly-owned subsidiary of Morgan Stanley. Prior to March 1, 2021, EVD was a direct, wholly-owned subsidiary
of EVC. Mr. Faust is also a Director of EVD. EVD also serves as placement agent for the Portfolio, if applicable.
Custodian.
State Street Bank and Trust Company (“State Street”), State Street Financial Center,
One Lincoln Street, Boston, MA 02111, serves as custodian to each Fund and Portfolio, if applicable. State Street has custody of
all cash and securities representing a Fund’s interest in the Portfolio, has custody of the Portfolio’s and each
Fund's assets, maintains the general ledger of the Portfolio and each Fund and computes the daily net asset value of interests
in the Portfolio and the net asset value of shares of each Fund. In such capacity it attends to details in connection with the
sale, exchange, substitution, transfer or other dealings with each Fund's and the Portfolio’s investments, receives and disburses
all funds and performs various other ministerial duties upon receipt of proper instructions from the Trust and the Portfolio. State
Street also provides services in connection with the preparation of shareholder reports and the electronic filing of such reports
with the SEC.
9. The following replaces the
second paragraph in “Other Service Providers” for Eaton Vance Global Income Builder NextShares:
Custodian.
State Street Bank and Trust Company (“State Street”), State Street Financial Center,
One Lincoln Street, Boston, MA 02111, serves as custodian to each Fund and Portfolio, if applicable. State Street has custody of
all cash and securities representing a Fund’s interest in the Portfolio, has custody of the Portfolio’s and each
Fund's assets, maintains the general ledger of the Portfolio and each Fund and computes the daily net asset value of interests
in the Portfolio and the net asset value of shares of each Fund. In such capacity it attends to details in connection with the
sale, exchange, substitution, transfer or other dealings with each Fund's and the Portfolio’s investments, receives and disburses
all funds and performs various other ministerial duties upon receipt of proper instructions from the Trust and the Portfolio. State
Street also provides services in connection with the preparation of shareholder reports and the electronic filing of such reports
with the SEC.
10. The following replaces the
corresponding disclosure in “Portfolio Securities Transactions”:
Decisions concerning the execution of portfolio security transactions,
including the selection of the market and the broker-dealer firm or other financial intermediary (each an “intermediary”),
are made by the investment adviser. Each Fund is responsible for the expenses associated with its portfolio transactions. The investment
adviser is also responsible for the execution of transactions for all other accounts managed by it. The investment adviser places
the portfolio security transactions for execution with one or more intermediaries firms. The investment adviser uses its best efforts
to obtain execution of portfolio security transactions at prices that, in the investment adviser’s judgment, are advantageous
to the client and at a reasonably competitive spread or (when a disclosed commission is being charged) at reasonably competitive
commission rates. In seeking such execution, the investment adviser will use its best judgment in evaluating the terms of a transaction,
and will give consideration to various relevant factors, which may include, without limitation, the full range and quality of the
intermediary’s services, responsiveness of the intermediary to the investment adviser, the size and type of the transaction,
the nature and character of the market for the security, the confidentiality, speed and certainty of effective execution required
for the transaction, the general execution and operational capabilities of the intermediary, the reputation, reliability, experience
and financial condition of the intermediary, the value and quality of the services rendered by the intermediary in this and other
transactions, and the amount of the spread or commission, if any. In addition, the investment adviser may consider the receipt
of Research Services (as defined below), provided it does not compromise the investment adviser’s obligation to seek best
overall execution for a Fund and is otherwise in compliance with applicable law. The investment adviser may engage in portfolio
transactions with an intermediary that sells shares of Eaton Vance funds, provided such transactions are not directed to that intermediary
as compensation for the promotion or sale of such shares.
As described in the Prospectus, following the closing of the Transaction
on March 1, 2021, the investment adviser became an “affiliated person,” as defined in the 1940 Act, of Morgan Stanley
and its affiliates, including certain intermediaries (as previously defined). As a result, the investment adviser is subject to
certain restrictions regarding transactions with Morgan Stanley-affiliated intermediaries, as set forth in the 1940 Act. Under
certain circumstances, such restrictions may limit the investment adviser’sability to place portfolio transactions on behalf
of a Fund or Portfolio at the desired time or price. Any transaction the investment adviser enters into with a Morgan Stanley-affiliated
intermediary on behalf of a Fund or Portfolio will be done in compliance with applicable laws, rules, and regulations; will be
subject to any restrictions contained in a Fund’s or Portfolio’s investment advisory agreement; will be subject to
the investment adviser’s duty to seek best execution; and, will comply with any applicable policies and procedures of the
investment adviser, as described below.
Subject to the overriding objective of obtaining the best execution of
orders and applicable rules and regulations, as described above, a Fund or Portfolio may use an affiliated intermediary, including
a Morgan Stanley-affiliated intermediary, to effect Fund or Portfolio portfolio transactions, including transactions in futures
contracts and options on futures contracts, under procedures adopted by the Board. In order to use such affiliated intermediaries,
the Fund’s or Portfolio’s Board must approve and periodically review procedures reasonably designed to ensure that
commission rates and other remuneration paid to the affiliated intermediaries are fair and reasonable in comparison to those of
other intermediaries for comparable transactions involving similar securities being purchased or sold during a comparable time
period.
Pursuant to an order issued by the SEC, a Fund or Portfolio is permitted
to engage in principal transactions in money market instruments, subject to certain conditions, with Morgan Stanley & Co. LLC,
a broker-dealer affiliated with Morgan Stanley.
Transactions on stock exchanges and other agency transactions involve the
payment of negotiated brokerage commissions. Such commissions vary among different broker-dealer firms, and a particular broker-dealer
may charge different commissions according to such factors as the difficulty and size of the transaction and the volume of business
done with such broker-dealer. Transactions in foreign securities often involve the payment of brokerage commissions, which may
be higher than those in the United States. There is generally no stated commission in the case of securities traded in the over-the-counter
markets including transactions in fixed-income securities which are generally purchased and sold on a net basis (i.e., without
commission) through intermediaries and banks acting for their own account rather than as brokers. Such intermediaries attempt to
profit from such transactions by buying at the bid price and selling at the higher asked price of the market for such obligations,
and the difference between the bid and asked price is customarily referred to as the spread. Fixed-income transactions may also
be transacted directly with the issuer of the obligations. In an underwritten offering the price paid often includes a disclosed
fixed commission or discount retained by the underwriter or dealer. Although spreads or commissions paid on portfolio security
transactions will, in the judgment of the investment adviser, be reasonable in relation to the value of the services provided,
commissions exceeding those which another firm might charge may be paid to intermediaries who were selected to execute transactions
on behalf of the investment adviser’s clients in part for providing brokerage and research services to the investment adviser
as permitted by applicable law.
Research Services provided by (and produced by) broker-dealers that execute
portfolio transactions or from affiliates of executing broker-dealers are referred to as “Proprietary Research.” Except
for trades executed in jurisdictions where such consideration is not permissible, the investment adviser may and does consider
the receipt of Proprietary Research Services as a factor in selecting broker dealers to execute client portfolio transactions,
provided it does not compromise the investment adviser’s obligation to seek best overall execution. In jurisdictions where
permissible, the investment adviser also may consider the receipt of Research Services under so called “client commission
arrangements” or “commission sharing arrangements” (both referred to as “CCAs”) as a factor in selecting
broker dealers to execute transactions, provided it does not compromise the investment adviser’s obligation to seek best
overall execution. Under a CCA arrangement, the investment adviser may cause client accounts to effect transactions through a broker-dealer
and request that the broker-dealer allocate a portion of the commissions paid on those transactions to a pool of commission credits
that are paid to other firms that provide Research Services to the investment adviser. Under a CCA, the broker-dealer that provides
the Research Services need not execute the trade. Participating in CCAs may enable the investment adviser to consolidate payments
for research using accumulated client commission credits from transactions executed through a
particular broker-dealer to periodically pay for Research Services obtained
from and provided by other firms, including other broker-dealers that supply Research Services. The investment adviser believes
that CCAs offer the potential to optimize the execution of trades and the acquisition of a variety of high quality Research Services
that the investment adviser might not be provided access to absent CCAs. The investment adviser may enter into CCA arrangements
with a number of broker-dealers and other firms, including certain affiliates of the investment adviser. The investment adviser
will only enter into and utilize CCAs to the extent permitted by Section 28(e) and other applicable law.
The investment companies sponsored by the investment adviser or certain
of its affiliates also may allocate brokerage commissions to acquire information relating to the
performance, fees and expenses of such companies and other investment companies, which information is used by the members
of the Board of such companies to fulfill their responsibility to oversee the quality of the services provided to various entities,
including the investment adviser, to such companies. Such companies may also pay cash for such information.
Securities considered as investments for
each Fund and Portfolio, if applicable, may also be appropriate for other investment accounts managed by the investment adviser
or certain of its affiliates. Whenever decisions are made to buy or sell securities by each Fund or Portfolio and one or more of
such other accounts simultaneously, the investment adviser will allocate the security transactions (including “new”
issues) in a manner which it believes to be equitable under the circumstances. As a result of such allocations, there may be instances
where each Fund or Portfolio will not participate in a transaction that is allocated among other accounts. If an aggregated order
cannot be filled completely, allocations will generally be made on a pro rata basis. An order may not be allocated on a pro rata
basis where, for example: (i) consideration is given to portfolio managers who have been instrumental in developing or negotiating
a particular investment; (ii) consideration is given to an account with specialized investment policies that coincide with the
particulars of a specific investment; (iii) pro rata allocation would result in odd-lot or de minimis amounts being allocated to
a portfolio or other client; or (iv) where the investment adviser reasonably determines that departure from a pro rata allocation
is advisable. While these aggregation and allocation policies could have a detrimental effect on the price or amount of the securities
available to each Fund or Portfolio from time to time, it is the opinion of the members of the Board that the benefits from
the investment adviser organization outweigh any disadvantage that may arise from exposure to simultaneous transactions.
11. The following is added as
a new section immediately prior to “Financial Statements”:
POTENTIAL CONFLICTS OF INTEREST
As a diversified global financial services firm, Morgan Stanley engages
in a broad spectrum of activities, including financial advisory services, investment management activities, lending, commercial
banking, sponsoring and managing private investment funds, engaging in broker-dealer transactions and principal securities, commodities
and foreign exchange transactions, research publication and other activities. In the ordinary course of its business, Morgan Stanley
is a full-service investment banking and financial services firm and therefore engages in activities where Morgan Stanley’s
interests or the interests of its clients may conflict with the interests of a Fund or Portfolio, if applicable, (collectively
for the purposes of this section, “Fund” or “Funds”). Morgan Stanley advises clients and sponsors, manages
or advises other investment funds and investment programs, accounts and businesses (collectively, together with the Funds, any
new or successor funds, programs, accounts or businesses, the ‘‘Affiliated Investment Accounts’’) with
a wide variety of investment objectives that in some instances may overlap or conflict with a Fund’s investment objectives
and present conflicts of interest. In addition, Morgan Stanley may also from time to time create new or successor Affiliated Investment
Accounts that may compete with a Fund and present similar conflicts of interest. The discussion below enumerates certain actual,
apparent and potential conflicts of interest. There is no assurance that conflicts of interest will be resolved in favor of Fund
shareholders and, in fact, they may not be. Conflicts of interest not described below may also exist.
Material Non-public
and Other Information. It is expected that confidential or material non-public information regarding an investment or potential
investment opportunity may become available to the investment adviser. If such information becomes available, the investment adviser
may be precluded (including by applicable law or internal policies or procedures) from pursuing an investment or disposition opportunity
with respect to such investment or investment opportunity.
The investment adviser may also from time to time be subject to contractual
‘‘stand-still’’ obligations and/or confidentiality obligations that may restrict its ability to trade in
certain investments on a Fund’s behalf. In addition, the investment adviser may be precluded from disclosing such information
to an investment team, even in circumstances in which the information would be beneficial if disclosed. Therefore, the investment
team may not be provided access to material non-public information in the possession of Morgan Stanley that might be relevant to
an investment decision to be made on behalf of a Fund, and the investment team may initiate a transaction or sell an investment
that, if such information had been known to it, may not have been undertaken. In addition, certain members of the investment team
may be recused from certain investment-related discussions so that such members do not receive information that would limit their
ability to perform functions of their employment with the investment adviser or its affiliates unrelated to that of a Fund. Furthermore,
access to certain parts of Morgan Stanley may be subject to third party confidentiality obligations and to information barriers
established by Morgan Stanley in order to manage potential conflicts of interest and regulatory restrictions, including without
limitation joint transaction restrictions pursuant to the 1940 Act. Accordingly, the investment adviser’s ability to source
investments from other business units within Morgan Stanley may be limited and there can be no assurance that the investment adviser
will be able to source any investments from any one or more parts of the Morgan Stanley network.
The investment adviser may restrict its investment decisions and activities
on behalf of the Funds in various circumstances, including because of applicable regulatory requirements or information held by
the investment adviser or Morgan Stanley. The investment adviser might not engage in transactions or other activities for, or enforce
certain rights in favor of, a Fund due to Morgan Stanley’s activities outside the Funds. In instances where trading of an
investment is restricted, the investment adviser may not be able to purchase or sell such investment on behalf of a Fund, resulting
in the Fund’s inability to participate in certain desirable transactions. This inability to buy or sell an investment could
have an adverse effect on a Fund’s portfolio due to, among other things, changes in an investment’s value during the
period its trading is restricted. Also, in situations where the investment adviser is required to aggregate its positions with
those of other Morgan Stanley business units for position limit calculations, the investment adviser may have to refrain from making
investments due to the positions held by other Morgan Stanley business units or their clients. There may be other situations where
the investment adviser refrains from making an investment due to additional disclosure obligations, regulatory requirements, policies,
and reputational risk, or the investment adviser may limit purchases or sales of securities in respect of which Morgan Stanley
is engaged in an underwriting or other distribution capacity.
Morgan Stanley has established certain information barriers and other
policies to address the sharing of information between different businesses within Morgan Stanley. As a result of information barriers,
the investment adviser generally will not have access, or will have limited access, to certain information and personnel in other
areas of Morgan Stanley relating to business transactions for clients (including transactions in investing, banking, prime brokerage
and certain other areas), and generally will not manage the Funds with the benefit of the information held by such other areas.
Morgan Stanley, due to its access to and knowledge of funds, markets and securities based on its prime brokerage and other businesses,
may make decisions based on information or take (or refrain from taking) actions with respect to interests in investments of the
kind held (directly or indirectly) by the Funds in a manner that may be adverse to the Funds, and will not have any obligation
or other duty to share information with the investment adviser.
In limited circumstances, however, including for purposes of managing
business and reputational risk, and subject to policies and procedures, Morgan Stanley personnel, including personnel of the investment
adviser, on one side of an information barrier may have access to information and personnel on the other side of the information
barrier through “wall crossings.” The investment adviser faces conflicts of interest in determining whether to engage
in such wall crossings. Information obtained in connection with such wall crossings may limit or restrict the ability of the investment
adviser to engage in or otherwise effect transactions on behalf of the Funds (including purchasing or selling securities that the
investment adviser may otherwise have purchased or sold for a Fund in the absence of a wall crossing). In managing conflicts of
interest that arise because of the foregoing, the investment adviser generally will be subject to fiduciary requirements. The investment
adviser may also implement internal information barriers or ethical walls, and the conflicts described herein with respect to information
barriers and otherwise with respect to Morgan Stanley and the investment adviser will also apply internally within the investment
adviser. As a result, a Fund may not be permitted to transact in (e.g., dispose of a security in whole or in part) during periods
when it otherwise would have been able to do so, which could adversely affect a Fund. Other investors in the security that are
not subject to such restrictions may be able to transact in the security during such periods. There may also be circumstances in
which, as a result of information held by certain portfolio management teams in the investment adviser, the investment adviser
limits an activity or transaction for a Fund, including if the Fund is managed by a portfolio management team other than the team
holding such information.
Investments by Morgan
Stanley and its Affiliated Investment Accounts. In serving in multiple capacities to Affiliated Investment Accounts, Morgan
Stanley, including the investment adviser and its investment teams, may have obligations to other clients or investors in Affiliated
Investment Accounts, the fulfillment of which may not be in the best interests of a Fund or its shareholders. A Fund’s investment
objectives may overlap with the investment objectives of certain Affiliated Investment Accounts. As a result, the members of an
investment team may face conflicts in the allocation of suitable investment opportunities among a Fund and other investment funds,
programs, accounts and businesses advised by or affiliated with the investment adviser. Certain Affiliated Investment Accounts
may provide for higher management or incentive fees or greater expense reimbursements or overhead allocations, all of which may
contribute to this conflict of interest and create an incentive for the investment adviser to favor such other accounts.
Morgan Stanley currently invests and plans to continue to invest on its
own behalf and on behalf of its Affiliated Investment Accounts in a wide variety of investment opportunities globally. Morgan Stanley
and its Affiliated Investment Accounts, to the extent consistent with applicable law and policies and procedures, will be permitted
to invest in investment opportunities without making such opportunities available to a Fund beforehand. Subject to the foregoing,
Morgan Stanley may offer investments that fall into the investment objectives of an Affiliated Investment Account to such account
or make such investment on its own behalf, even though such investment also falls within a Fund’s investment objectives.
A Fund may invest in opportunities that Morgan Stanley and/or one or more Affiliated Investment Accounts has declined, and vice
versa. All of the foregoing may reduce the number of investment opportunities available to a Fund and may create conflicts of interest
in allocating investment opportunities. Investors should note that the conflicts inherent in making such allocation decisions may
not always be resolved to a Fund’s advantage. There can be no assurance that a Fund will have an opportunity to participate
in certain opportunities that fall within their investment objectives.
To seek to reduce potential conflicts of interest and to attempt to allocate
such investment opportunities in a fair and equitable manner, the investment adviser has implemented allocation policies and procedures.
These policies and procedures are intended to give all clients of the investment adviser, including the Funds, fair access to investment
opportunities consistent with the requirements of organizational documents, investment strategies, applicable laws and regulations,
and the fiduciary duties of the investment adviser. Each client of the investment adviser that is subject to the allocation policies
and procedures, including each Fund, is assigned an investment team and portfolio manager(s) by the investment adviser. The investment
team and portfolio managers review investment opportunities and will decide with respect to the allocation of each opportunity
considering various factors and in accordance with the allocation policies and procedures. The allocation policies and procedures
are subject to change. Investors should note that the conflicts inherent in making such allocation decisions may not always be
resolved to the advantage of a Fund.
It is possible that Morgan Stanley or an Affiliated Investment Account,
including another Eaton Vance fund, will invest in or advise a company that is or becomes a competitor of a company of which a
Fund holds an investment. Such investment could create a conflict between the Fund, on the one hand, and Morgan Stanley or the
Affiliated Investment Account, on the other hand. In such a situation, Morgan Stanley may also have a conflict in the allocation
of its own resources to the portfolio investment. Furthermore, certain Affiliated Investment Accounts will be focused primarily
on investing in other funds which may have strategies that overlap and/or directly conflict and compete with a Fund.
In addition, certain investment professionals who are involved in a Fund’s
activities remain responsible for the investment activities of other Affiliated Investment Accounts managed by the investment adviser
and its affiliates, and they will devote time to the management of such investments and other newly created Affiliated Investment
Accounts (whether in the form of funds, separate accounts or other vehicles), as well as their own investments. In addition, in
connection with the management of investments for other Affiliated Investment Accounts, members of Morgan Stanley and its affiliates
may serve on the boards of directors of or advise companies which may compete with a Fund’s portfolio investments. Moreover,
these Affiliated Investment Accounts managed by Morgan Stanley and its affiliates may pursue investment opportunities that may
also be suitable for a Fund.
It should be noted that Morgan Stanley may, directly or indirectly, make
large investments in certain of its Affiliated Investment Accounts, and accordingly Morgan Stanley’s investment in a Fund
may not be a determining factor in the outcome of any of the foregoing conflicts. Nothing herein restricts or in any way limits
the activities of Morgan Stanley, including its ability to buy or sell interests in, or provide financing to, equity and/or debt
instruments, funds or portfolio companies, for its own accounts or for the accounts of Affiliated Investment Accounts or other
investment funds or clients in accordance with applicable law.
Different clients of the investment adviser, including a Fund, may invest
in different classes of securities of the same issuer, depending on the respective clients’ investment objectives and policies.
As a result, the investment adviser and its affiliates, at times, will seek to satisfy fiduciary obligations to certain clients
owning one class of securities of a particular issuer by pursuing or enforcing rights on behalf of those clients with respect to
such class of securities, and those activities may have an adverse effect on another client which owns a different class of securities
of such issuer. For example, if one client holds debt securities of an issuer and another client holds equity securities of the
same issuer, if the issuer experiences financial or operational challenges, the investment adviser and its affiliates may seek
a liquidation of the issuer on behalf of the client that holds the debt securities, whereas the client holding the equity securities
may benefit from a reorganization of the issuer. Thus, in such situations, the actions taken by the investment adviser or its affiliates
on behalf of one client can negatively impact securities held by another client. These conflicts also exist as between the investment
adviser’s clients, including the Funds, and the Affiliated Investment Accounts managed by Morgan Stanley.
The investment adviser and its affiliates may give advice and recommend
securities to other clients which may differ from advice given to, or securities recommended or bought for, a Fund even though
such other clients’ investment objectives may be similar to those of the Fund.
The investment adviser and its affiliates manage long and short portfolios.
The simultaneous management of long and short portfolios creates conflicts of interest in portfolio management and trading in that
opposite directional positions may be taken in client accounts managed by the same investment team, and creates risks such as:
(i) the risk that short sale activity could adversely affect the market value of long positions in one or more portfolios (and
vice versa) and (ii) the risks associated with the trading desk receiving opposing orders in the same security simultaneously.
The investment adviser and its affiliates have adopted policies and procedures that are reasonably designed to mitigate these conflicts.
In certain circumstances, the investment adviser invest on behalf of itself in securities and other instruments that would be appropriate
for, held by, or may fall within the investment guidelines of its clients, including a Fund. At times, the investment adviser will
give advice or take action for its own accounts that differs from, conflicts with, or is adverse to advice given or action taken
for any client.
From time to time, conflicts also arise due to the fact that certain securities
or instruments maybe held in some client accounts, including a Fund, but not in others, or the client accounts may have different
levels of holdings in certain securities or instruments, and because the accounts pay different levels of fees to the investment
adviser. In addition, at times an investment adviser investment team will give advice or take action with respect to the investments
of one or more clients that is not given or taken with respect to other clients with similar investment programs, objectives, and
strategies. Accordingly, clients with similar strategies will not always hold the same securities or instruments or achieve the
same performance. The investment adviser’s investment teams also advise clients with conflicting programs, objectives or
strategies. These conflicts also exist as between the investment adviser’s clients, including the Funds, and the Affiliated
Investment Accounts managed by Morgan Stanley.
The investment adviser maintains separate trading desks by investment
team and generally based on asset class, including two trading desks trading equity securities. These trading desks operate independently
of one another. The two equity trading desks do not share information. The separate equity trading desks may result in one desk
competing against the other desk when implementing buy and sell transactions, possibly causing certain accounts to pay more or
receive less for a security than other accounts. In addition, Morgan Stanley and its affiliates maintain separate trading desks
that operate independently of each other and do not share information with the investment adviser. The Morgan Stanley and affiliate
trading desks may compete against the investment adviser trading desks when implementing buy and sell transactions, possibly causing
certain Affiliated Investment Accounts to pay more or receive less for a security than other Affiliated Investment Accounts.
Payments to Broker-Dealers
and Other Financial Intermediaries. The investment adviser and/or EVD may pay compensation, out of their own funds and not
as an expense of the Funds, to certain financial intermediaries (which may include affiliates of the investment adviser and EVD),
including recordkeepers and administrators of various deferred compensation plans, in connection with the sale, distribution, marketing
and retention of shares of the Funds and/or shareholder servicing. For example, the investment adviser or EVD may pay additional
compensation to a financial intermediary for, among other things, promoting the sale and distribution of Fund shares, providing
access to various programs, mutual fund platforms or preferred or recommended mutual fund lists that may be offered by a financial
intermediary, granting EVD access to a financial intermediary’s financial advisors and consultants, providing assistance
in the ongoing education and training of a financial intermediary’s financial personnel, furnishing marketing support, maintaining
share balances and/or for sub-accounting, recordkeeping, administrative, shareholder or transaction processing services. Such payments
are in addition to any distribution fees, shareholder servicing fees and/or transfer agency fees that may be payable by the Funds.
The additional payments may be based on various factors, including level of sales (based on gross or net sales or some specified
minimum sales or some other similar criteria related to sales of the Funds and/or some or all other Eaton Vance funds), amount
of assets invested by the financial intermediary’s customers (which could include current or aged assets of the Funds and/or
some or all other Eaton Vance funds), a Fund’s advisory fee, some other agreed upon amount or other measures as determined
from time to time by the investment adviser and/or EVD. The amount of these payments may be different for different financial intermediaries.
The prospect of receiving, or the receipt of, additional compensation,
as described above, by financial intermediaries may provide such financial intermediaries and their financial advisors and other
salespersons with an incentive to favor sales of shares of the Funds over other investment options with respect to which these
financial intermediaries do not receive additional compensation (or receives lower levels of additional compensation). These payment
arrangements, however, will not change the price that an investor pays for shares of the Funds or the amount that the Funds receive
to invest on behalf of an investor. Investors may wish to take such payment arrangements into account when considering and evaluating
any recommendations relating to Fund shares and should review carefully any disclosures provided by financial intermediaries as
to their compensation.
Morgan Stanley Trading
and Principal Investing Activities. Notwithstanding anything to the contrary herein, Morgan Stanley will generally conduct
its sales and trading businesses, publish research and analysis, and render investment advice without regard for a Fund’s
holdings, although these activities could have an adverse impact on the value of one or more of the Fund’s investments, or
could cause Morgan Stanley to have an interest in one or more portfolio investments that is different from, and potentially adverse
to that of a Fund. Furthermore, from time to time, the investment adviser or its affiliates may invest “seed” capital
in a Fund, typically to enable the Fund to commence investment operations and/or achieve sufficient scale. The investment adviser
and its affiliates may hedge such seed capital exposure by investing in derivatives or other instruments expected to produce offsetting
exposure. Such hedging transactions, if any, would occur outside of a Fund.
Morgan Stanley’s sales and trading, financing and principal investing
businesses (whether or not specifically identified as such, and including Morgan Stanley’s trading and principal investing
businesses) will not be required to offer any investment opportunities to a Fund. These businesses may encompass, among other things,
principal trading activities as well as principal investing.
Morgan Stanley’s sales and trading, financing and principal investing
businesses have acquired or invested in, and in the future may acquire or invest in, minority and/or majority control positions
in equity or debt instruments of diverse public and/or private companies. Such activities may put Morgan Stanley in a position
to exercise contractual, voting or creditor rights, or management or other control with respect to securities or loans of portfolio
investments or other issuers, and in these instances Morgan Stanley may, in its discretion and subject to applicable law, act to
protect its own interests or interests of clients, and not a Fund’s interests.
Subject to the limitations of applicable law, a Fund may purchase from
or sell assets to, or make investments in, companies in which Morgan Stanley has or may acquire an interest, including as an owner,
creditor or counterparty.
Morgan Stanley’s
Investment Banking Activities. Morgan Stanley advises clients on a variety of mergers, acquisitions, restructuring, bankruptcy
and financing transactions. Morgan Stanley may act as an advisor to clients, including other investment funds that may compete
with a Fund and with respect to investments that a Fund may hold. Morgan Stanley may give advice and take action with respect to
any of its clients or proprietary accounts that may differ from the advice given, or may involve an action of a different timing
or nature than the action taken, by a Fund. Morgan Stanley may give advice and provide recommendations to persons competing with
a Fund and/or any of a Fund’s investments that are contrary to the Fund’s best interests and/or the best interests
of any of its investments.
Morgan Stanley could be engaged in financial advising, whether on the
buy-side or sell-side, or in financing or lending assignments that could result in Morgan Stanley’s determining in its discretion
or being required to act exclusively on behalf of one or more third parties, which could limit a Fund’s ability to transact
with respect to one or more existing or potential investments. Morgan Stanley may have relationships with third-party funds, companies
or investors who may have invested in or may look to invest in portfolio companies, and there could be conflicts between a Fund’s
best interests, on the one hand, and the interests of a Morgan Stanley client or counterparty, on the other hand.
To the extent that Morgan Stanley advises creditor or debtor companies
in the financial restructuring of companies either prior to or after filing for protection under Chapter 11 of the Bankruptcy Code
or similar laws in other jurisdictions, the investment adviser’s flexibility in making investments in such restructurings
on a Fund’s behalf may be limited. Morgan Stanley could provide investment banking services to competitors of portfolio companies,
as well as to private equity and/or private credit funds; such activities may present Morgan Stanley with a conflict of interest
vis-a-vis a Fund’s investment and may also result in a conflict in respect of the allocation of investment banking resources
to portfolio companies.
To the extent permitted by applicable law, Morgan Stanley may provide
a broad range of financial services to companies in which a Fund invests, including strategic and financial advisory services,
interim acquisition financing and other lending and underwriting or placement of securities, and Morgan Stanley generally will
be paid fees (that may include warrants or other securities) for such services. Morgan Stanley will not share any of the foregoing
interest, fees and other compensation received by it (including, for the avoidance of doubt, amounts received by the investment
adviser) with a Fund, and any advisory fees payable will not be reduced thereby.
Morgan Stanley may be engaged to act as a financial advisor to a company
in connection with the sale of such company, or subsidiaries or divisions thereof, may represent potential buyers of businesses
through its mergers and acquisition activities and may provide lending and other related financing services in connection with
such transactions. Morgan Stanley’s compensation for such activities is usually based upon realized consideration and is
usually contingent, in substantial part, upon the closing of the transaction. Under these circumstances, a Fund may be precluded
from participating in a transaction with or relating to the company being sold or participating in any financing activity related
to merger or acquisition.
To meet applicable regulatory requirements, there are periods when the
investment adviser will not engage in certain types of transactions in the securities of companies for which a broker-dealer affiliated
with Morgan Stanley is performing investment banking services. Fund shareholders will not receive notice of such instances. In
particular, when a broker-dealer affiliated with Morgan Stanley is engaged in an underwriting or other distribution of securities
of a company, the investment adviser may be prohibited from purchasing such securities on behalf of a Fund. In addition, under
certain circumstances, the investment adviser generally will not initiate transactions in the securities of companies with respect
to which affiliates of the investment adviser may have controlling interests or are affiliated.
The investment adviser believes that the nature and range of clients to
whom Morgan Stanley and its subsidiaries render investment banking and other services is such that it would be inadvisable to exclude
these companies from the Fund’s portfolio.
Morgan Stanley’s
Marketing Activities. Morgan Stanley is engaged in the business of underwriting, syndicating, brokering, administering,
servicing, arranging and advising on the distribution of a wide variety of securities and other investments in which a Fund may
invest. Subject to the restrictions of the 1940 Act, including Sections 10(f) and 17(e) thereof, a Fund may invest in transactions
in which Morgan Stanley acts as underwriter, placement agent, syndicator, broker, administrative agent, servicer, advisor, arranger
or structuring agent and receives fees or other compensation from the sponsors of such products or securities. Any fees earned
by Morgan Stanley in such capacity will not be shared with the investment adviser or the Funds. Certain conflicts of interest,
in addition to the receipt of fees or other compensation, would be inherent in these transactions. Moreover, the interests of one
of Morgan Stanley’s clients with respect to an issuer of securities in which a Fund has an investment may be adverse to the
investment adviser’s or a Fund’s best interests. In conducting the foregoing activities, Morgan Stanley will be acting
for its other clients and will have no obligation to act in the investment adviser’s or a Fund’s best interests.
Client Relationships.
Morgan Stanley has existing and potential relationships with a significant number of corporations, institutions and individuals.
In providing services to its clients, Morgan Stanley may face conflicts of interest with respect to activities recommended to or
performed for such clients, on the one hand, and a Fund, its shareholders or the entities in which the Fund invests, on the other
hand. In addition, these client relationships may present conflicts of interest in determining whether to offer certain investment
opportunities to a Fund.
In acting as principal or in providing advisory and other services to
its other clients, Morgan Stanley may engage in or recommend activities with respect to a particular matter that conflict with
or are different from activities engaged in or recommended by the investment adviser on a Fund’s behalf.
Principal Investments.
To the extent permitted by applicable law, there may be situations in which a Funds’ interests may conflict with the
interests of one or more general accounts of Morgan Stanley and its affiliates or accounts managed by Morgan Stanley or its affiliates.
This may occur because these accounts hold public and private debt and equity securities of many issuers which may be or become
portfolio companies, or from whom portfolio companies may be acquired.
Transactions with
Portfolio Companies of Affiliated Investment Accounts. The companies in which a Fund may invest may be counterparties to
or participants in agreements, transactions or other arrangements with portfolio companies or other entities of portfolio investments
of Affiliated Investment Accounts (for example, a company in which a Fund invests may retain a company in which an Affiliated Investment
Account invests to provide services or may acquire an asset from such company or vice versa). Certain of these agreements, transactions
and arrangements involve fees, servicing payments, rebates and/or other benefits to Morgan Stanley or its affiliates. For example,
portfolio entities may, including at the encouragement of Morgan Stanley, enter into agreements regarding group procurement and/or
vendor discounts. Morgan Stanley and its affiliates may also participate in these agreements and may realize better pricing or
discounts as a result of the participation of portfolio entities. To the extent permitted by applicable law, certain of these agreements
may provide for commissions or similar payments and/or discounts or rebates to be paid to a portfolio entity of an Affiliated Investment
Account, and such payments or discounts or rebates may also be made directly to Morgan Stanley or its affiliates. Under these arrangements,
a particular portfolio company or other entity may benefit to a greater degree than the other participants, and the funds, investment
vehicles and accounts (which may or may not include a Fund) that own an interest in such entity will receive a greater relative
benefit from the arrangements than the Eaton Vance funds, investment vehicles or accounts that do not own an interest therein.
Fees and compensation received by portfolio companies of Affiliated Investment Accounts in relation to the foregoing will not be
shared with a Fund or offset advisory fees payable.
Investments in Portfolio
Investments of Other Funds. To the extent permitted by applicable law, when a Fund invests in certain companies or other
entities, other funds affiliated with the investment adviser may have made or may be making an investment in such companies or
other entities. Other funds that have been or may be managed by the investment adviser may invest in the companies or other entities
in which a Fund has made an investment. Under such circumstances, a Fund and such other funds may have conflicts of interest (e.g.,
over the terms, exit strategies and related matters, including the exercise of remedies of their respective investments). If the
interests held by a Fund are different from (or take priority over) those held by such other funds, the investment adviser may
be required to make a selection at the time of conflicts between the interests held by such other funds and the interests held
by a Fund.
Allocation of Expenses.
Expenses may be incurred that are attributable to a Fund and one or more other Affiliated Investment Accounts (including in connection
with issuers in which a Fund and such other Affiliated Investment Accounts have overlapping investments). The allocation of such
expenses among such entities raises potential conflicts of interest. The investment adviser and its affiliates intend to allocate
such common expenses among a Fund and any such other Affiliated Investment Accounts on a pro rata basis or in such other manner
as the investment adviser deems to be fair and equitable or in such other manner as may be required by applicable law.
Temporary Investments.
To more efficiently invest short-term cash balances held by a Fund, the investment adviser may invest such balances on an
overnight “sweep” basis in shares of one or more money market funds or other short-term vehicles. It is anticipated
that the investment adviser to these money market funds or other short-term vehicles may be the investment adviser (or an affiliate)
to the extent permitted by applicable law, including Rule 12d1-1 under the 1940 Act. The Funds currently invests in Eaton Vance
Cash Reserves Fund, LLC (Cash Reserves Fund), an affiliated investment company managed by Eaton Vance, for this purpose. Eaton
Vancedoes not currently receive a fee for advisory services provided to Cash Reserves Fund.
Transactions with
Affiliates. The investment adviser and any investment sub-adviser might purchase securities from underwriters or placement
agents in which a Morgan Stanley affiliate is a member of a syndicate or selling group, as a result of which an affiliate might
benefit from the purchase through receipt of a fee or otherwise. Neither the investment adviser nor any investment sub-adviser
will purchase securities on behalf of a Fund from an affiliate that is acting as a manager of a syndicate or selling group. Purchases
by the investment adviser on behalf of a Fund from an affiliate acting as a placement agent must meet the requirements of applicable
law. Furthermore, Morgan Stanley may face conflicts of interest when the Funds use service providers affiliated with Morgan Stanley
because Morgan Stanley receives greater overall fees when they are used.
General Process for
Potential Conflicts. All of the transactions described above involve the potential for conflicts of interest between the
investment adviser, related persons of the investment adviser and/or their clients. The Advisers Act, the 1940 Act and ERISA impose
certain requirements designed to decrease the possibility of conflicts of interest between an investment adviser and its clients.
In some cases, transactions may be permitted subject to fulfillment of certain conditions. Certain other transactions may be prohibited.
In addition, the investment adviser has instituted policies and procedures designed to prevent conflicts of interest from arising
and, when they do arise, to ensure that it effects transactions for clients in a manner that is consistent with its fiduciary duty
to its clients and in accordance with applicable law. The investment adviser seeks to ensure that potential or actual conflicts
of interest are appropriately resolved taking into consideration the overriding best interests of the client.
EATON VANCE BALANCED FUND
EATON VANCE GREATER INDIA FUND
EATON VANCE VT FLOATING-RATE INCOME FUND
Supplement to Prospectuses dated May 1, 2020
EATON VANCE STOCK NEXTSHARES
Supplement to Prospectus dated May 1, 2020 as revised
February 17, 2021
EATON VANCE EMERGING MARKETS DEBT FUND
Supplement to Prospectus
dated June 1, 2020
EATON VANCE DIVIDEND BUILDER FUND
EATON VANCE GROWTH FUND
EATON VANCE LARGE-CAP VALUE FUND
EATON VANCE REAL ESTATE FUND
EATON VANCE SMALL-CAP FUND
EATON VANCE SPECIAL EQUITIES FUND
Supplement to Prospectus dated May 1, 2020 as revised September 21, 2020
EATON VANCE FOCUSED GROWTH OPPORTUNITIES FUND
EATON VANCE FOCUSED VALUE OPPORTUNITIES FUND
Supplement to Prospectus
dated July 1, 2020 as revised September 21, 2020
EATON VANCE EMERGING MARKETS DEBT OPPORTUNITIES
FUND
Supplement to Prospectus dated December 1, 2020
EATON VANCE GREATER CHINA GROWTH FUND
EATON VANCE RICHARD BERNSTEIN ALL ASSET STRATEGY FUND
EATON VANCE RICHARD BERNSTEIN EQUITY STRATEGY FUND
Supplement to Prospectuses
dated January 1, 2021
EATON VANCE CORE PLUS BOND FUND
Supplement to Prospectus
dated February 1, 2021
EATON VANCE EMERGING AND FRONTIER COUNTRIES EQUITY
FUND
EATON VANCE EMERGING MARKETS LOCAL INCOME FUND
EATON VANCE GLOBAL BOND FUND
EATON VANCE GLOBAL MACRO ABSOLUTE RETURN FUND
EATON VANCE GLOBAL MACRO ABSOLUTE RETURN ADVANTAGE
FUND
EATON VANCE GOVERNMENT OPPORTUNITIES FUND
EATON VANCE SHORT DURATION GOVERNMENT INCOME FUND
EATON VANCE SHORT DURATION INFLATION-PROTECTED
INCOME FUND
EATON VANCE SHORT DURATION STRATEGIC INCOME FUND
Supplement to Prospectuses
dated March 1, 2021
1. The following replaces corresponding
disclosure under “Management.” in “Management and Organization”:
Each Fund’s investment adviser is Eaton Vance Management (“Eaton
Vance”) or Boston Management and Research, (“BMR”), as applicable, and, if applicable, each Portfolio’s
investment adviser is BMR. Each of Eaton Vance and BMR have offices at Two International Place, Boston, MA 02110. Eaton Vance
and BMR and their predecessor organizations have been managing assets since 1924 and managing mutual funds since 1931. Prior to
March 1, 2021, Eaton Vance was a wholly owned subsidiary and BMR was an indirect wholly owned subsidiary of Eaton Vance Corp. (“EVC”).
On March 1, 2021, Morgan Stanley acquired EVC (the “Transaction”)
and Eaton Vance and BMR became indirect, wholly-owned subsidiaries of Morgan Stanley. In connection with the Transaction,
each Fund and each Portfolio entered into a new investment advisory agreement with its adviser and, if applicable, each Fund’s
and each Portfolio’s adviser entered into a new investment sub-advisory agreement with its sub-adviser. Each such agreement
was approved by shareholders prior to the consummation of the Transaction and was effective upon its closing.
Each Fund is allocated its pro rata share of the advisory fee paid by
the Portfolio or Portfolios in which it invests, as applicable. Effective March 1, 2021, any fee reduction agreement previously
applicable to a Fund or Portfolio, as applicable, was incorporated into its new investment advisory agreement with its investment
adviser.
Morgan Stanley (NYSE: MS), whose principal offices are at 1585 Broadway,
New York, New York 10036, is a preeminent global financial services firm engaged in securities trading and brokerage activities,
as well as providing investment banking, research and analysis, financing and financial advisory services. As of December
31, 2020, after giving effect to the Transaction as described above, Morgan Stanley’s asset management operations had aggregate
assets under management of approximately $1.4 trillion.
2. The following replaces the
first paragraph under “Payments to Financial Intermediaries.” in “Purchasing Shares” for all Funds except
Eaton Vance Stock NextShares:
Payments to Financial
Intermediaries. In addition to payments disclosed under “Sales Charges” below, the principal underwriter, out
of its own resources, may make cash payments to certain financial intermediaries (which may include affiliates of the principal
underwriter and investment adviser) who provide marketing support, transaction processing and/or administrative services and, in
some cases, include some or all Eaton Vance funds in preferred or specialized selling programs. Payments made by the principal
underwriter to a financial intermediary may be significant and are typically in the form of fees based on Fund sales, assets, transactions
processed and/or accounts attributable to that financial intermediary. Financial intermediaries also may receive amounts from the
principal underwriter in connection with educational or due diligence meetings that include information concerning Eaton Vance
funds. The principal underwriter may pay or allow other promotional incentives or payments to financial intermediaries to the extent
permitted by applicable laws and regulations.
3. The following replaces the
fourth paragraph under “Distribution” in “Purchasing Shares” for Eaton Vance Stock NextShares:
The investment adviser (or one of its affiliates) may make payments to
financial intermediaries (which may include affiliates of the investment adviser) related to marketing activities and presentations,
educational training programs, conferences, the development of technology platforms and reporting systems, or for making shares
of the Fund available to their customers. Such payments, which may be significant to the financial intermediary, are not made by
the Fund. Rather, such payments are made by the investment adviser (or one of its affiliates) from its own resources. A financial
intermediary may make decisions about which investment options it recommends or makes available, or the level of services provided,
to its customers based on the payments it is eligible to receive. Therefore, such payments to a financial intermediary create conflicts
of interest between such intermediary and its customers and may cause the intermediary to recommend the Fund over another investment.
4. The following replaces “Fund
Purchases through Edward D. Jones & Co., L.P. (“Edward Jones”)” under “Appendix A – Financial
Intermediary Sales Charge Variations” for all Funds except Eaton Vance Emerging Markets Debt Fund, Eaton Vance Stock NextShares
and Eaton Vance VT Floating-Rate Income Fund:
Policies Regarding Transactions Through Edward
D. Jones & Co., L.P. (“Edward Jones”)
The following information has been provided by Edward Jones:
Effective on or after March 1, 2021, the following information supersedes
prior information with respect to transactions and positions held in fund shares through an Edward Jones system. Clients of Edward
Jones (also referred to as “shareholders”) purchasing fund shares on the Edward Jones commission and fee-based platforms
are eligible only for the following sales charge discounts (also referred to as “breakpoints”) and waivers, which can
differ from discounts and waivers described elsewhere in the mutual fund prospectus or statement of additional information (“SAI”)
or through another broker-dealer. In all instances, it is the shareholder's responsibility to inform Edward Jones at the time of
purchase of any relationship, holdings of fund family or other facts qualifying the purchaser for discounts or waivers. Edward
Jones can ask for documentation from the shareholder of such circumstance. Shareholders should contact Edward Jones if they have
questions regarding their eligibility for these discounts and waivers.
Breakpoints
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·
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Breakpoint pricing, otherwise known as volume pricing, at dollar thresholds as described in the prospectus.
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Rights of Accumulation (“ROA”)
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·
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The applicable sales charge on a purchase of Class A shares is determined by taking into account all share classes (except
certain money market funds and any assets held in group retirement plans) of the mutual fund family held by the shareholder or
in an account grouped by Edward Jones with other accounts for the purpose of providing certain pricing considerations (“pricing
groups”). If grouping assets as a shareholder, this includes all share classes held on the Edward Jones platform and/or held
on another platform. The inclusion of eligible fund family assets in the ROA calculation is dependent on the shareholder notifying
Edward Jones of such assets at the time of calculation. Money market funds are included only if such shares were sold with a sales
charge at the time of purchase or acquired in exchange for shares purchased with a sales charge.
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|
·
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The employer maintaining a SEP IRA plan and/or SIMPLE IRA plan may elect to establish or change ROA for the IRA accounts associated
with the plan to a plan-level grouping as opposed to including all share classes at a shareholder or pricing group level.
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·
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ROA is determined by calculating the higher of cost minus redemptions or market value (current shares x NAV).
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Letter of Intent (“LOI”)
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·
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Through a LOI, shareholders can receive the sales charge and breakpoint discounts for purchases shareholders intend to make
over a 13-month period from the date Edward Jones receives the LOI. The LOI is determined by calculating the higher of cost or
market value of qualifying holdings at LOI initiation in combination with the value that the shareholder intends to buy over a
13-month period to calculate the front-end sales charge and any breakpoint discounts. Each purchase the shareholder makes during
that 13-month period will receive the sales charge and breakpoint discount that applies to the total amount. If during the 13-month
period the shareholder redeems any of the shares purchased pursuant to a LOI, the value of the redeemed shares will not be included
for purposes of satisfying the LOI. The inclusion of eligible fund family assets in the LOI calculation is dependent on the shareholder
notifying Edward Jones of such assets at the time of calculation. Purchases made before the LOI is received by Edward Jones are
not adjusted under the LOI and will not reduce the sales charge previously paid. Sales charges will be adjusted if LOI is not met.
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|
·
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If the employer maintaining a SEP IRA plan and/or SIMPLE IRA plan has elected to establish or change ROA for the IRA accounts
associated with the plan to a plan-level grouping, LOIs will also be at the plan-level and may only be established by the employer.
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Front-end Sales Charge Waivers
Sales charges are waived for the following shareholders and
in the following situations:
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·
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Associates of Edward Jones and its affiliates and their family members who are in the same pricing group (as determined by
Edward Jones under its policies and procedures) as the associate. This waiver will continue for the remainder of the associate's
life if the associate retires from Edward Jones in good-standing and remains in good standing pursuant to Edward Jones' policies
and procedures.
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·
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Shares purchased in an Edward Jones fee-based program.
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·
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Shares purchased through reinvestment of capital gains distributions and dividend reinvestment.
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·
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Shares purchased from the proceeds of redeemed shares of the same fund family so long as the following conditions are met:
1) the proceeds are from the sale of shares within 60 days of the purchase, and 2) the sale and purchase are made in the same share
class and the same account or the purchase is made in an individual retirement account with proceeds from liquidations in a non-retirement
account.
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·
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Shares exchanged into Class A shares from another share class so long as the exchange is into the same fund and was initiated
at the discretion of Edward Jones. Edward Jones is responsible for any remaining Contingent Deferred Sales Charge (“CDSC”)
due to the fund company or its affiliate, if applicable. Any future purchases are subject to the applicable sales charge as disclosed
in the prospectus.
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·
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Exchanges from Class C shares to Class A shares of the same fund, generally, in the 84th month following the anniversary of
the purchase date or earlier at the discretion of Edward Jones.
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CDSC Waivers
If the shareholder purchases shares that are subject to a CDSC
and those shares are redeemed before the CDSC is expired, the shareholder is responsible to pay the CDSC except in the following
conditions:
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·
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The death or disability of the shareholder.
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|
·
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Systematic withdrawals with up to 10% per year of the account value.
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·
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Return of excess contributions from an Individual Retirement Account (IRA).
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·
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Shares sold as part of a required minimum distribution for IRA and retirement accounts if the redemption is taken in or after
the year the shareholder reaches qualified age based on applicable IRS regulations.
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·
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Shares sold to pay Edward Jones fees or costs in such cases where the transaction is initiated by Edward Jones. Edward Jones
is responsible for any remaining CDSC due to the fund company or its affiliate, if applicable.
|
|
·
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Shares exchanged in an Edward Jones fee-based program. Edward Jones is responsible for any remaining CDSC due to the fund company
or its affiliate, if applicable.
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·
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Shares acquired through NAV reinstatement.
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·
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Shares redeemed at the discretion of Edward Jones for Minimum Balances as described below.
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******************************************************************************
Other Important Information Regarding Transactions Through Edward Jones
Minimum Purchase Amounts
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·
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Initial purchase minimum: $250
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·
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Subsequent purchase minimum: none
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Minimum Balances
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·
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Edward Jones has the right to redeem at its discretion fund holdings with a balance of $250 or less. The following are examples
of accounts that are not included in this policy:
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·
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A fee-based account held on an Edward Jones platform
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·
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A 529 account held on an Edward Jones platform
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·
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An account with an active systematic investment plan or LOI
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Exchanging Share Classes
At any time it deems necessary, Edward Jones has the authority to exchange
at NAV a shareholder's holdings in a fund to Class A shares of the same fund. Edward Jones is responsible for any remaining CDSC
due to the fund company or its affiliate, if applicable. Any future purchases are subject to the applicable sales charge as disclosed
in the prospectus.
March 1, 2021
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37970 3.1.21
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EATON VANCE BALANCED FUND
EATON VANCE GREATER INDIA FUND
EATON VANCE STOCK NEXTSHARES
EATON VANCE VT FLOATING-RATE INCOME FUND
Supplement to Statement of Additional Information
(“SAI”) dated May 1, 2020
EATON VANCE EMERGING MARKETS DEBT FUND
Supplement to SAI dated June 1, 2020
EATON VANCE DIVIDEND BUILDER FUND
EATON VANCE GROWTH FUND
EATON VANCE LARGE-CAP VALUE FUND
EATON VANCE REAL ESTATE FUND
EATON VANCE SMALL-CAP FUND
EATON VANCE SPECIAL EQUITIES FUND
Supplement to SAI dated May 1, 2020 as revised September 21, 2020
EATON VANCE FOCUSED GROWTH OPPORTUNITIES FUND
EATON VANCE FOCUSED VALUE OPPORTUNITIES FUND
Supplement to SAI
dated July 1, 2020 as revised September 21, 2020
EATON VANCE EMERGING MARKETS DEBT OPPORTUNITIES
FUND
Supplement to SAI dated December 1, 2020
EATON VANCE GREATER CHINA GROWTH FUND
EATON VANCE RICHARD BERNSTEIN ALL ASSET STRATEGY FUND
EATON VANCE RICHARD BERNSTEIN EQUITY STRATEGY FUND
Supplement to SAIs
dated January 1, 2021
EATON VANCE CORE PLUS BOND FUND
Supplement to SAI
dated February 1, 2021
EATON VANCE EMERGING AND FRONTIER COUNTRIES EQUITY
FUND
EATON VANCE EMERGING MARKETS LOCAL INCOME FUND
EATON VANCE GLOBAL BOND FUND
EATON VANCE GLOBAL MACRO ABSOLUTE RETURN FUND
EATON VANCE GLOBAL MACRO ABSOLUTE RETURN ADVANTAGE
FUND
EATON VANCE GOVERNMENT OPPORTUNITIES FUND
EATON VANCE SHORT DURATION GOVERNMENT INCOME FUND
EATON VANCE SHORT DURATION INFLATION-PROTECTED
INCOME FUND
EATON VANCE SHORT DURATION STRATEGIC INCOME FUND
Supplement to SAIs
dated March 1, 2021
1. The following replaces the
first paragraph under “Fund Management.” in “Management and Organization”:
Fund Management.
The Trustees of the Trust are responsible for the overall management and supervision of the affairs
of the Trust. If applicable, the Trustees of the Portfolio are responsible for the overall management and supervision of the Portfolio.
The Board members and officers of the Trust and the Portfolio are listed below. Except as indicated, each individual has held the
office shown or other offices in the same company for the last five years. Board members hold indefinite terms of office. Each
Trustee holds office until his or her successor is elected and qualified, subject to a prior death, resignation, retirement, disqualification
or removal. Under the terms of each Fund’s and Portfolio’s, if applicable, current Trustee retirement policy,
an Independent Trustee must retire and resign as a Trustee on the earlier of: (i) the first day of July following his or her 74th
birthday; or (ii), with limited exception, December 31st of the 20th year in which he or she has served as a Trustee. However,
if such retirement and resignation would cause each Fund or Portfolio to be out of compliance with Section 16 of the 1940
Act or any other regulations or guidance of the SEC, then such retirement and resignation will not become effective until such
time as action has been taken for each Fund or Portfolio to be in compliance therewith. The “noninterested Trustees”
consist of those Trustees who are not “interested persons” of the Trust and the Portfolio, as that term is defined
under the 1940 Act. The business address of each Board member and officer is Two International Place, Boston, Massachusetts 02110.
As used in this SAI, “EVC” refers to Eaton Vance Corp., “EV” refers to Eaton Vance, Inc., “Eaton
Vance” refers to Eaton Vance Management and “EVD” refers to Eaton Vance Distributors, Inc. (see “Principal
Underwriter” under “Other Service Providers”). EV is the trustee of each of Eaton Vance and BMR. Effective March
1, 2021, each of Eaton Vance, BMR, EVD and EV are indirect wholly-owned subsidiaries of Morgan Stanley. Each officer affiliated
with Eaton Vance may hold a position with other Eaton Vance affiliates that is comparable to his or her position with Eaton Vance
listed below.
2. The following replaces the
Thomas E. Faust Jr. row in the Trustees table and in his biographical narrative in “Management and Organization”:
THOMAS E. FAUST JR.
1958
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|
Trustee
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|
Since 2007
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|
Chairman of Morgan Stanley Investment Management, Inc. (MSIM), Director and President of EV, Chief Executive Officer and President of Eaton Vance and BMR, and Director of EVD. Formerly, Chairman, Chief Executive Officer and President of EVC. Trustee and/or officer of 141 registered investment companies. Mr. Faust is an interested person because of his positions with MSIM, BMR, Eaton Vance, EVD and EV, which are affiliates of the Trust and Portfolio, and his former position with EVC, which was an affiliate of the Trust and Portfolio prior to March 1, 2021.
|
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141
|
|
Formerly, Director of EVC (2007-2021) and Hexavest Inc. (2012-2021) (investment management firm).
|
Thomas E. Faust
Jr. Mr. Faust has served as a member of the Eaton Vance Fund Boards since 2007. Effective March 1, 2021, he is Chairman
of MSIM. He is also Director and President of EV, Chief Executive Officer and President of Eaton Vance and BMR, and Director of
EVD. Mr. Faust previously served as Chairman and Chief Executive Officer of EVC from 2007 through March 1, 2021 and as President
of EVC from 2006 through March 1, 2021. Mr. Faust served as a Director of Hexavest Inc. from 2012-2021. From 2016 through 2019,
Mr. Faust served as a Director of SigFig Wealth Management LLC. Mr. Faust previously served as an equity analyst, portfolio manager,
Director of Equity Research and Management and Chief Investment Officer of Eaton Vance from 1985-2007. He holds B.S. degrees in
Mechanical Engineering and Economics from the Massachusetts Institute of Technology and an MBA from Harvard Business School. Mr.
Faust has been a Chartered Financial Analyst since 1988. He is a trustee and member of the executive committee of the Boston Symphony
Orchestra, Inc. and trustee emeritus of Wellesley College.
3. The following is added as
the first paragraph under “Investment Advisory Services” in “Investment Advisory and Administrative Services”:
As described in the Prospectus, upon the closing of the transaction by
which Morgan Stanley acquired EVC (the “Transaction”), each Fund and each Portfolio entered into a new investment advisory
agreement or investment advisory and administrative agreement with Eaton Vance or BMR, as applicable, and Eaton Vance or BMR entered
into a new investment sub-advisory agreement with the Fund’s or Portfolio’s sub-adviser, as applicable.
4. The following replaces the
last paragraph under “Investment Advisory Services.” in “Investment Advisory and Administrative Services”:
Each Investment Advisory Agreement, Investment Advisory and Administrative
Agreement or Investment Sub-Advisory Agreement, as applicable, with the investment adviser or sub-adviser continues in effect through
and including the second anniversary of its execution and shall continue in full force and effect indefinitely thereafter, but
only so long as such continuance after such second anniversary is specifically approved at least annually (i) by the vote of a
majority of the noninterested Trustees of the Trust, in the case of a Fund, or a Portfolio, if applicable, cast in person at a
meeting specifically called for the purpose of voting on such approval and (ii) by the Board of the Trust, in the case of a Fund,
or a Portfolio, if applicable, or by vote of a majority of the outstanding voting securities of the Portfolio or Fund. Each Agreement
may be terminated at any time without penalty on sixty (60) days’ written notice by either party, or by vote of the majority
of the outstanding voting securities of the Portfolio or Fund, and each Agreement will terminate automatically in the event of
its assignment. Each Agreement provides that the investment adviser may render services to others. Each Agreement also provides
that the investment adviser shall not be liable for any loss incurred in connection with the performance of its duties, or action
taken or omitted under the Agreement, in the absence of willful misfeasance, bad faith, gross negligence or reckless disregard
of its obligations and duties thereunder, or for any losses sustained in the acquisition, holding or disposition of any security
or other investment. Each Agreement is not intended to, and does not, confer upon any person not a party to it any right, benefit
or remedy of any nature.
5. The following replaces “Information
About BMR and Eaton Vance.” in “Investment Advisory and Administrative Services”:
Information About
BMR and Eaton Vance. BMR and Eaton Vance are business trusts organized under the laws of the Commonwealth of Massachusetts.
EV serves as trustee of BMR and Eaton Vance. As described in the Prospectus, following the closing of the Transaction on March
1, 2021, EV, Eaton Vance and BMR became indirect wholly-owned subsidiaries of Morgan Stanley (NYSE: MS), a preeminent global financial
services firm engaged in securities trading and brokerage activities, as well as providing investment banking, research and analysis,
financing and financial advisory services.
Prior to March 1, 2021, EV and Eaton Vance were wholly-owned subsidiaries
of EVC, a Maryland corporation and publicly-held holding company and BMR was an indirect wholly owned subsidiary of EVC. EVC through
its subsidiaries and affiliates engaged primarily in investment management, administration and marketing activities. The Directors
of EVC were Thomas E.
Faust Jr., Ann E. Berman, Leo I. Higdon, Jr., Paula A. Johnson, Brian
D. Langstraat, Dorothy E. Puhy, Winthrop H. Smith, Jr. and Richard A. Spillane, Jr. All shares of the outstanding Voting Common
Stock of EVC were deposited in a Voting Trust, the Voting Trustees of which were Mr. Faust, Paul W. Bouchey, Craig R. Brandon,
Daniel C. Cataldo, Michael A. Cirami, Cynthia J. Clemson, James H. Evans, Maureen A. Gemma, Laurie G. Hylton, Mr. Langstraat, Thomas
Lee, Frederick S. Marius, David C. McCabe, Edward J. Perkin, Lewis R. Piantedosi, Charles B. Reed, Craig P. Russ, Thomas C. Seto,
John L. Shea, Eric A. Stein, John H. Streur, Andrew N. Sveen, Payson F. Swaffield, R. Kelly Williams and Matthew J. Witkos (all
of whom are or were officers of Eaton Vance or its affiliates). The Voting Trustees had unrestricted voting rights for the election
of Directors of EVC. Prior to March 1, 2021, all of the outstanding voting trust receipts issued under said Voting Trust were owned
by certain of the officers of BMR and Eaton Vance who may also have been officers, or officers and Directors of EVC and EV. As
indicated under “Management and Organization,” all of the officers of the Trust (as well as Mr. Faust who is also a
Trustee) are employees of Eaton Vance and/or BMR.
6. The following replaces “Compensation
Structure for Eaton Vance and BMR” and “Method to Determine Compensation.” under “Portfolio Managers”
in “Investment Advisory and Administrative Services” as applicable:
Compensation Structure
for Eaton Vance and BMR. Compensation of the investment adviser's portfolio managers and other investment professionals
has the following primary components: (1) a base salary, (2) an annual cash bonus, and (3) annual non-cash compensation consisting
of restricted shares of Morgan Stanley stock that are subject to a fixed vesting and distribution schedule. The investment adviser’s
investment professionals also receive certain retirement, insurance and other benefits that are broadly available to the investment
adviser’s employees. Compensation of the investment adviser’s investment professionals is reviewed primarily on an
annual basis. Cash bonuses, stock-based compensation awards, and adjustments in base salary are typically paid or put into effect
at or shortly after the December 31st fiscal year end of Morgan Stanley.
Method to Determine
Compensation. The investment adviser compensates its portfolio managers based primarily on the scale and complexity
of their portfolio responsibilities and the total return performance of managed funds and accounts versus the benchmark(s) stated
in the prospectus, as well as an appropriate peer group (as described below). In addition to rankings within peer groups of funds
on the basis of absolute performance, consideration may also be given to relative risk-adjusted performance. Risk-adjusted performance
measures include, but are not limited to, the Sharpe ratio, which uses standard deviation and excess return to determine reward
per unit of risk. Performance is normally based on periods ending on the September 30th preceding fiscal year end. Fund performance
is normally evaluated primarily versus peer groups of funds as determined by Lipper Inc. and/or Morningstar, Inc. When a fund’s
peer group as determined by Lipper or Morningstar is deemed by the investment adviser’s management not to provide a fair
comparison, performance may instead be evaluated primarily against a custom peer group or market index. In evaluating the performance
of a fund and its manager, primary emphasis is normally placed on three-year performance, with secondary consideration of performance
over longer and shorter periods. For funds that are tax-managed or otherwise have an objective of after-tax returns, performance
is measured net of taxes. For other funds, performance is evaluated on a pre-tax basis. For funds with an investment objective
other than total return (such as current income), consideration will also be given to the fund’s success in achieving its
objective. For managers responsible for multiple funds and accounts, investment performance is evaluated on an aggregate basis,
based on averages or weighted averages among managed funds and accounts. Funds and accounts that have performance-based advisory
fees are not accorded disproportionate weightings in measuring aggregate portfolio manager performance.
The compensation of portfolio managers with other job responsibilities (such
as heading an investment group or providing analytical support to other portfolios) will include consideration of the scope of
such responsibilities and the managers’ performance in meeting them.
The investment adviser seeks to compensate portfolio managers commensurate
with their responsibilities and performance, and competitive with other firms within the investment management industry. The investment
adviser participates in investment-industry compensation surveys and utilizes survey data as a factor in determining salary, bonus
and stock-based compensation levels for portfolio managers and other investment professionals. Salaries, bonuses and stock-based
compensation are also influenced by the operating performance of the investment adviser and Morgan Stanley. The overall annual
cash bonus pool is generally based on a substantially fixed percentage of pre-bonus adjusted operating income. While the salaries
of the investment adviser’s portfolio managers are comparatively fixed, cash bonuses and stock-based compensation may fluctuate
significantly from year to year, based on changes in manager performance and other factors as described herein. For a high performing
portfolio manager, cash bonuses and stock-based compensation may represent a substantial portion of total compensation.
7. The following replaces the
first two paragraphs in “Other Service Providers” for each Fund except Eaton Vance Stock NextShares:
Principal
Underwriter. Eaton Vance Distributors, Inc. (“EVD”), Two International
Place, Boston, MA 02110 is the principal underwriter of each Fund. The principal underwriter acts as principal in selling
shares under a Distribution Agreement with the Trust. The expenses of printing copies of prospectuses used to offer shares
and other selling literature and of advertising are borne by the principal underwriter. The fees and expenses of qualifying
and registering and maintaining qualifications and registrations of a Fund and its shares under federal and state securities laws
are borne by the Fund. The
Distribution Agreement is renewable annually by the members of the Board (including a majority of the
noninterested Trustees who have no direct or indirect financial interest in the operation of the Distribution Agreement or any
applicable Distribution Plan), may be terminated on sixty days’ notice either by such Trustees or by vote of a majority of
the outstanding Fund shares or on six months’ notice by the principal underwriter and is automatically terminated upon assignment.
The principal underwriter distributes shares on a “best efforts” basis under which it is required to take and pay for
only such shares as may be sold. Effective March 1, 2021, EVD is an indirect wholly-owned subsidiary of Morgan Stanley. Prior to
March 1, 2021, EVD was a direct, wholly-owned subsidiary of EVC. Mr. Faust is also a Director of EVD. EVD also serves as placement
agent for the Portfolio, if applicable.
Custodian.
State Street Bank and Trust Company (“State Street”), State Street Financial Center,
One Lincoln Street, Boston, MA 02111, serves as custodian to each Fund and Portfolio, if applicable. State Street has custody of
all cash and securities representing a Fund’s interest in the Portfolio, has custody of the Portfolio’s and each
Fund's assets, maintains the general ledger of the Portfolio and each Fund and computes the daily net asset value of interests
in the Portfolio and the net asset value of shares of each Fund. In such capacity it attends to details in connection with the
sale, exchange, substitution, transfer or other dealings with each Fund's and the Portfolio’s investments, receives and disburses
all funds and performs various other ministerial duties upon receipt of proper instructions from the Trust and the Portfolio. State
Street also provides services in connection with the preparation of shareholder reports and the electronic filing of such reports
with the SEC.
8. The following replaces the
second paragraph in “Other Service Providers” for Eaton Vance Stock NextShares:
Custodian.
State Street Bank and Trust Company (“State Street”), State Street Financial Center,
One Lincoln Street, Boston, MA 02111, serves as custodian to each Fund and Portfolio, if applicable. State Street has custody of
all cash and securities representing a Fund’s interest in the Portfolio, has custody of the Portfolio’s and each
Fund's assets, maintains the general ledger of the Portfolio and each Fund and computes the daily net asset value of interests
in the Portfolio and the net asset value of shares of each Fund. In such capacity it attends to details in connection with the
sale, exchange, substitution, transfer or other dealings with each Fund's and the Portfolio’s investments, receives and disburses
all funds and performs various other ministerial duties upon receipt of proper instructions from the Trust and the Portfolio. State
Street also provides services in connection with the preparation of shareholder reports and the electronic filing of such reports
with the SEC.
9. The following replaces the
corresponding disclosure in “Portfolio Securities Transactions” for all Funds except Eaton Vance VT Floating-Rate Fund:
Decisions concerning the execution of portfolio security transactions,
including the selection of the market and the broker-dealer firm or other financial intermediary (each an “intermediary”),
are made by the investment adviser. Each Fund and each Portfolio is responsible for the expenses associated with its portfolio
transactions. The investment adviser is also responsible for the execution of transactions for all other accounts managed by it.
The investment adviser places the portfolio security transactions for execution with one or more intermediaries firms. The investment
adviser uses its best efforts to obtain execution of portfolio security transactions at prices that, in the investment adviser’s
judgment, are advantageous to the client and at a reasonably competitive spread or (when a disclosed commission is being charged)
at reasonably competitive commission rates. In seeking such execution, the investment adviser will use its best judgment in evaluating
the terms of a transaction, and will give consideration to various relevant factors, which may include, without limitation, the
full range and quality of the intermediary’s services, responsiveness of the intermediary to the investment adviser, the
size and type of the transaction, the nature and character of the market for the security, the confidentiality, speed and certainty
of effective execution required for the transaction, the general execution and operational capabilities of the intermediary, the
reputation, reliability, experience and financial condition of the intermediary, the value and quality of the services rendered
by the intermediary in this and other transactions, and the amount of the spread or commission, if any. In addition, the investment
adviser may consider the receipt of Research Services (as defined below), provided it does not compromise the investment adviser’s
obligation to seek best overall execution for a Fund or Portfolio and is otherwise in compliance with applicable law. The investment
adviser may engage in portfolio transactions with an intermediary that sells shares of Eaton Vance funds, provided such transactions
are not directed to that intermediary as compensation for the promotion or sale of such shares.
As described in the Prospectus, following the closing of the Transaction
on March 1, 2021, the investment adviser became an “affiliated person,” as defined in the 1940 Act, of Morgan Stanley
and its affiliates, including certain intermediaries (as previously defined). As a result, the investment adviser is subject to
certain restrictions regarding transactions with Morgan Stanley-affiliated intermediaries, as set forth in the 1940 Act. Under
certain circumstances, such restrictions may limit the investment adviser’s ability to place portfolio transactions on behalf
of a Fund or Portfolio at the desired time or price. Any transaction the investment adviser enters into with a Morgan Stanley-affiliated
intermediary on behalf of a Fund or Portfolio will be done in compliance with applicable laws, rules, and regulations; will be
subject to any restrictions contained in a Fund’s investment advisory agreement; will be subject to the investment adviser’s
duty to seek best execution; and, will comply with any applicable policies and procedures, as described below.
Subject to the overriding objective of obtaining the best execution of
orders and applicable rules and regulations, as described above, a Fund or Portfolio may use an affiliated intermediary, including
a Morgan Stanley-affiliated intermediary, to effect Fund or Portfolio portfolio transactions, including transactions in futures
contracts and options on futures contracts, under procedures adopted by the Board. In order to use such affiliated intermediaries,
the Fund’s or Portfolio’s Board must approve and periodically review procedures reasonably designed to ensure that
commission rates and other remuneration paid to the affiliated intermediaries are fair and reasonable in comparison to those of
other intermediaries for comparable transactions involving similar securities being purchased or sold during a comparable time
period.
Pursuant to an order issued by the SEC, a Fund or Portfolio is permitted
to engage in principal transactions in money market instruments, subject to certain conditions, with Morgan Stanley & Co. LLC,
a broker-dealer affiliated with Morgan Stanley.
Research Services provided by (and produced by) broker-dealers that execute
portfolio transactions or from affiliates of executing broker-dealers are referred to as “Proprietary Research.” Except
for trades executed in jurisdictions where such consideration is not permissible, the investment adviser may and does consider
the receipt of Proprietary Research Services as a factor in selecting broker dealers to execute client portfolio transactions,
provided it does not compromise the investment adviser’s obligation to seek best overall execution. In jurisdictions where
permissible, the investment adviser also may consider the receipt of Research Services under so called “client commission
arrangements” or “commission sharing arrangements” (both referred to as “CCAs”) as a factor in selecting
broker dealers to execute transactions, provided it does not compromise the investment adviser’s obligation to seek best
overall execution. Under a CCA arrangement, the investment adviser may cause client accounts to effect transactions through a broker-dealer
and request that the broker-dealer allocate a portion of the commissions paid on those transactions to a pool of commission credits
that are paid to other firms that provide Research Services to the investment adviser. Under a CCA, the broker-dealer that provides
the Research Services need not execute the trade. Participating in CCAs may enable the investment adviser to consolidate payments
for research using accumulated client commission credits from transactions executed through a particular broker-dealer to periodically
pay for Research Services obtained from and provided by other firms, including other broker-dealers that supply Research Services.
The investment adviser believes that CCAs offer the potential to optimize the execution of trades and the acquisition of a variety
of high quality Research Services that the investment adviser might not be provided access to absent CCAs. The investment adviser
may enter into CCA arrangements with a number of broker-dealers and other firms, including certain affiliates of the investment
adviser. The investment adviser will only enter into and utilize CCAs to the extent permitted by Section 28(e) and other applicable
law.
The investment companies sponsored by the investment adviser or certain
of its affiliates also may allocate brokerage commissions to acquire information relating to the
performance, fees and expenses of such companies and other investment companies, which information is used by the members
of the Board of such companies to fulfill their responsibility to oversee the quality of the services provided to various entities,
including the investment adviser, to such companies. Such companies may also pay cash for such information.
Securities considered as investments for
each Fund and Portfolio, if applicable, may also be appropriate for other investment accounts managed by the investment adviser
or certain of its affiliates. Whenever decisions are made to buy or sell securities by each Fund or Portfolio and one or more of
such other accounts simultaneously, the investment adviser will allocate the security transactions (including “new”
issues) in a manner which it believes to be equitable under the circumstances. As a result of such allocations, there may be instances
where each Fund or Portfolio will not participate in a transaction that is allocated among other accounts. If an aggregated order
cannot be filled completely, allocations will generally be made on a pro rata basis. An order may not be allocated on a pro rata
basis where, for example: (i) consideration is given to portfolio managers who have been instrumental in developing or negotiating
a particular investment; (ii) consideration is given to an account with specialized investment policies that coincide with the
particulars of a specific investment; (iii) pro rata allocation would result in odd-lot or de minimis amounts being allocated to
a portfolio or other client; or (iv) where the investment adviser reasonably determines that departure from a pro rata allocation
is advisable. While these aggregation and allocation policies could have a detrimental effect on the price or amount of the securities
available to each Fund or Portfolio from time to time, it is the opinion of the members of the Board that the benefits from
the investment adviser organization outweigh any disadvantage that may arise from exposure to simultaneous transactions.
10. The following replaces the
corresponding disclosure in “Portfolio Securities Transactions” for Eaton Vance VT Floating-Rate Fund:
A Fund may transact in Senior Loans with major international banks, selected
domestic regional banks, insurance companies, finance companies and other financial institutions and market participants. In selecting
financial institutions with which a Fund may transact, Eaton Vance will consider, among other factors, the financial strength,
professional ability, level of service and research capability of the institution. A Fund may trade in other types of investments
(e.g., bonds and equity securities) which generally are traded through broker-dealers.
Decisions concerning the execution of portfolio security transactions,
including the selection of the market and the broker-dealer firm or other financial intermediary (each an “intermediary”),
are made by the investment adviser. Each Fund is responsible for the expenses associated with its portfolio transactions. The investment
adviser is also responsible for the execution of transactions for all other accounts managed by it. The investment
adviser places the portfolio security transactions for execution with one or more intermediaries firms. The investment adviser
uses its best efforts to obtain
execution of portfolio security transactions at prices that, in the investment adviser’s
judgment, are advantageous to the client and at a reasonably competitive spread or (when a disclosed commission is being charged)
at reasonably competitive commission rates. In seeking such execution, the investment adviser will use its best judgment in evaluating
the terms of a transaction, and will give consideration to various relevant factors, which may include, without limitation, the
full range and quality of the intermediary’s services, responsiveness of the intermediary to the investment adviser, the
size and type of the transaction, the nature and character of the market for the security, the confidentiality, speed and certainty
of effective execution required for the transaction, the general execution and operational capabilities of the intermediary, the
reputation, reliability, experience and financial condition of the intermediary, the value and quality of the services rendered
by the intermediary in this and other transactions, and the amount of the spread or commission, if any. In addition, the investment
adviser may consider the receipt of Research Services (as defined below), provided it does not compromise the investment adviser’s
obligation to seek best overall execution for a Fund and is otherwise in compliance with applicable law. The investment adviser
may engage in portfolio transactions with an intermediary that sells shares of Eaton Vance funds, provided such transactions are
not directed to that intermediary as compensation for the promotion or sale of such shares.
As described in the Prospectus, following the closing of the Transaction
on March 1, 2021, Eaton Vance became an “affiliated person,” as defined in the 1940 Act, of Morgan Stanley and its
affiliates, including certain intermediaries (as previously defined). As a result, Eaton Vance is subject to certain restrictions
regarding transactions with Morgan Stanley-affiliated intermediaries, as set forth in the 1940 Act. Under certain circumstances,
such restrictions may limit Eaton Vance’s ability to place portfolio transactions on behalf of a Fund at the desired time
or price. Any transaction Eaton Vance enters into with a Morgan Stanley-affiliated intermediary on behalf of a Fund will be done
in compliance with applicable laws, rules, and regulations; will be subject to any restrictions contained in a Fund’s investment
advisory agreement with Eaton Vance; will be subject to Eaton Vance’s duty to seek best execution; and, will comply with
any applicable Eaton Vance policies and procedures, as described below.
Subject to the overriding objective of obtaining the best execution of
orders and applicable rules and regulations, as described above, a Fund may use an affiliated intermediary, including a Morgan
Stanley-affiliated intermediary, to effect Fund portfolio transactions, including transactions in futures contracts and options
on futures contracts, under procedures adopted by the Board. In order to use such affiliated intermediaries, the Fund’s Board
must approve and periodically review procedures reasonably designed to ensure that commission rates and other remuneration paid
to the affiliated intermediaries are fair and reasonable in comparison to those of other intermediaries for comparable transactions
involving similar securities being purchased or sold during a comparable time period.
Pursuant to an order issued by the SEC, a Fund is permitted to engage in
principal transactions in money market instruments, subject to certain conditions, with Morgan Stanley & Co. LLC, a broker-dealer
affiliated with Morgan Stanley.
Transactions on stock exchanges and other agency transactions involve the
payment of negotiated brokerage commissions. Such commissions vary among different broker-dealer firms, and a particular broker-dealer
may charge different commissions according to such factors as the difficulty and size of the transaction and the volume of business
done with such broker-dealer. Transactions in foreign securities often involve the payment of brokerage commissions, which may
be higher than those in the United States. There is generally no stated commission in the case of securities traded in the over-the-counter
markets including transactions in fixed-income securities which are generally purchased and sold on a net basis (i.e., without
commission) through intermediaries and banks acting for their own account rather than as brokers. Such intermediaries attempt to
profit from such transactions by buying at the bid price and selling at the higher asked price of the market for such obligations,
and the difference between the bid and asked price is customarily referred to as the spread. Fixed-income transactions may also
be transacted directly with the issuer of the obligations. In an underwritten offering the price paid often includes a disclosed
fixed commission or discount retained by the underwriter or dealer. Although spreads or commissions paid on portfolio security
transactions will, in the judgment of the investment adviser, be reasonable in relation to the value of the services provided,
commissions exceeding those which another firm might charge may be paid to intermediaries who were selected to execute transactions
on behalf of the investment adviser’s clients in part for providing brokerage and research services to the investment adviser
as permitted by applicable law.
Research Services provided by (and produced by) broker-dealers that execute
portfolio transactions or from affiliates of executing broker-dealers are referred to as “Proprietary Research.” Except
for trades executed in jurisdictions where such consideration is not permissible, the investment adviser may and does consider
the receipt of Proprietary Research Services as a factor in selecting broker dealers to execute client portfolio transactions,
provided it does not compromise the investment adviser’s obligation to seek best overall execution. In jurisdictions where
permissible, the investment adviser also may consider the receipt of Research Services under so called “client commission
arrangements” or “commission sharing arrangements” (both referred to as “CCAs”) as a factor in selecting
broker dealers to execute transactions, provided it does not compromise the investment adviser’s obligation to seek best
overall execution. Under a CCA arrangement, the investment adviser may cause client accounts to effect transactions through a broker-dealer
and request that the broker-dealer allocate a portion of the commissions paid on those transactions to a pool of commission credits
that are paid to other firms that provide
Research Services to the investment adviser. Under a CCA, the broker-dealer
that provides the Research Services need not execute the trade. Participating in CCAs may enable the investment adviser to consolidate
payments for research using accumulated client commission credits from transactions executed through a particular broker-dealer
to periodically pay for Research Services obtained from and provided by other firms, including other broker-dealers that supply
Research Services. The investment adviser believes that CCAs offer the potential to optimize the execution of trades and the acquisition
of a variety of high quality Research Services that the investment adviser might not be provided access to absent CCAs. The investment
adviser may enter into CCA arrangements with a number of broker-dealers and other firms, including certain affiliates of the investment
adviser. The investment adviser will only enter into and utilize CCAs to the extent permitted by Section 28(e) and other applicable
law.
The investment companies sponsored by the investment adviser or certain
of its affiliates also may allocate brokerage commissions to acquire information relating to the
performance, fees and expenses of such companies and other investment companies, which information is used by the members
of the Board of such companies to fulfill their responsibility to oversee the quality of the services provided to various entities,
including the investment adviser, to such companies. Such companies may also pay cash for such information.
Securities considered as investments for
each Fund and Portfolio, if applicable, may also be appropriate for other investment accounts managed by the investment adviser
or certain of its affiliates. Whenever decisions are made to buy or sell securities by each Fund or Portfolio and one or more of
such other accounts simultaneously, the investment adviser will allocate the security transactions (including “new”
issues) in a manner which it believes to be equitable under the circumstances. As a result of such allocations, there may be instances
where each Fund or Portfolio will not participate in a transaction that is allocated among other accounts. If an aggregated order
cannot be filled completely, allocations will generally be made on a pro rata basis. An order may not be allocated on a pro rata
basis where, for example: (i) consideration is given to portfolio managers who have been instrumental in developing or negotiating
a particular investment; (ii) consideration is given to an account with specialized investment policies that coincide with the
particulars of a specific investment; (iii) pro rata allocation would result in odd-lot or de minimis amounts being allocated to
a portfolio or other client; or (iv) where the investment adviser reasonably determines that departure from a pro rata allocation
is advisable. While these aggregation and allocation policies could have a detrimental effect on the price or amount of the securities
available to each Fund or Portfolio from time to time, it is the opinion of the members of the Board that the benefits from
the investment adviser organization outweigh any disadvantage that may arise from exposure to simultaneous transactions.
11. The following is added as
a new section immediately prior to “Financial Statements”:
POTENTIAL CONFLICTS OF INTEREST
As a diversified global financial services firm, Morgan Stanley engages
in a broad spectrum of activities, including financial advisory services, investment management activities, lending, commercial
banking, sponsoring and managing private investment funds, engaging in broker-dealer transactions and principal securities, commodities
and foreign exchange transactions, research publication and other activities. In the ordinary course of its business, Morgan Stanley
is a full-service investment banking and financial services firm and therefore engages in activities where Morgan Stanley’s
interests or the interests of its clients may conflict with the interests of a Fund or Portfolio, if applicable, (collectively
for the purposes of this section, “Fund” or “Funds”). Morgan Stanley advises clients and sponsors, manages
or advises other investment funds and investment programs, accounts and businesses (collectively, together with the Funds, any
new or successor funds, programs, accounts or businesses, the ‘‘Affiliated Investment Accounts’’) with
a wide variety of investment objectives that in some instances may overlap or conflict with a Fund’s investment objectives
and present conflicts of interest. In addition, Morgan Stanley may also from time to time create new or successor Affiliated Investment
Accounts that may compete with a Fund and present similar conflicts of interest. The discussion below enumerates certain actual,
apparent and potential conflicts of interest. There is no assurance that conflicts of interest will be resolved in favor of Fund
shareholders and, in fact, they may not be. Conflicts of interest not described below may also exist.
Material Non-public
and Other Information. It is expected that confidential or material non-public information regarding an investment or potential
investment opportunity may become available to the investment adviser. If such information becomes available, the investment adviser
may be precluded (including by applicable law or internal policies or procedures) from pursuing an investment or disposition opportunity
with respect to such investment or investment opportunity.
The investment adviser may also from time to time be subject to contractual
‘‘stand-still’’ obligations and/or confidentiality obligations that may restrict its ability to trade in
certain investments on a Fund’s behalf. In addition, the investment adviser may be precluded from disclosing such information
to an investment team, even in circumstances in which the information would be beneficial if disclosed. Therefore, the investment
team may not be provided access to material non-public information in the possession of Morgan Stanley that might be relevant to
an investment decision to be made on behalf of a Fund, and the investment team may initiate a transaction or sell an investment
that, if such information had been known to it, may not have been undertaken. In addition, certain members of the investment team
may be recused from certain investment-related discussions so that such members do not receive information that would limit their
ability to perform
functions of their employment with the investment adviser or its affiliates
unrelated to that of a Fund. Furthermore, access to certain parts of Morgan Stanley may be subject to third party confidentiality
obligations and to information barriers established by Morgan Stanley in order to manage potential conflicts of interest and regulatory
restrictions, including without limitation joint transaction restrictions pursuant to the 1940 Act. Accordingly, the investment
adviser’s ability to source investments from other business units within Morgan Stanley may be limited and there can be no
assurance that the investment adviser will be able to source any investments from any one or more parts of the Morgan Stanley network.
The investment adviser may restrict its investment decisions and activities
on behalf of the Funds in various circumstances, including because of applicable regulatory requirements or information held by
the investment adviser or Morgan Stanley. The investment adviser might not engage in transactions or other activities for, or enforce
certain rights in favor of, a Fund due to Morgan Stanley’s activities outside the Funds. In instances where trading of an
investment is restricted, the investment adviser may not be able to purchase or sell such investment on behalf of a Fund, resulting
in the Fund’s inability to participate in certain desirable transactions. This inability to buy or sell an investment could
have an adverse effect on a Fund’s portfolio due to, among other things, changes in an investment’s value during the
period its trading is restricted. Also, in situations where the investment adviser is required to aggregate its positions with
those of other Morgan Stanley business units for position limit calculations, the investment adviser may have to refrain from making
investments due to the positions held by other Morgan Stanley business units or their clients. There may be other situations where
the investment adviser refrains from making an investment due to additional disclosure obligations, regulatory requirements, policies,
and reputational risk, or the investment adviser may limit purchases or sales of securities in respect of which Morgan Stanley
is engaged in an underwriting or other distribution capacity.
Morgan Stanley has established certain information barriers and other
policies to address the sharing of information between different businesses within Morgan Stanley. As a result of information barriers,
the investment adviser generally will not have access, or will have limited access, to certain information and personnel in other
areas of Morgan Stanley relating to business transactions for clients (including transactions in investing, banking, prime brokerage
and certain other areas), and generally will not manage the Funds with the benefit of the information held by such other areas.
Morgan Stanley, due to its access to and knowledge of funds, markets and securities based on its prime brokerage and other businesses,
may make decisions based on information or take (or refrain from taking) actions with respect to interests in investments of the
kind held (directly or indirectly) by the Funds in a manner that may be adverse to the Funds, and will not have any obligation
or other duty to share information with the investment adviser.
In limited circumstances, however, including for purposes of managing
business and reputational risk, and subject to policies and procedures, Morgan Stanley personnel, including personnel of the investment
adviser, on one side of an information barrier may have access to information and personnel on the other side of the information
barrier through “wall crossings.” The investment adviser faces conflicts of interest in determining whether to engage
in such wall crossings. Information obtained in connection with such wall crossings may limit or restrict the ability of the investment
adviser to engage in or otherwise effect transactions on behalf of the Funds (including purchasing or selling securities that the
investment adviser may otherwise have purchased or sold for a Fund in the absence of a wall crossing). In managing conflicts of
interest that arise because of the foregoing, the investment adviser generally will be subject to fiduciary requirements. The investment
adviser may also implement internal information barriers or ethical walls, and the conflicts described herein with respect to information
barriers and otherwise with respect to Morgan Stanley and the investment adviser will also apply internally within the investment
adviser. As a result, a Fund may not be permitted to transact in (e.g., dispose of a security in whole or in part) during periods
when it otherwise would have been able to do so, which could adversely affect a Fund. Other investors in the security that are
not subject to such restrictions may be able to transact in the security during such periods. There may also be circumstances in
which, as a result of information held by certain portfolio management teams in the investment adviser, the investment adviser
limits an activity or transaction for a Fund, including if the Fund is managed by a portfolio management team other than the team
holding such information.
Investments by Morgan
Stanley and its Affiliated Investment Accounts. In serving in multiple capacities to Affiliated Investment Accounts, Morgan
Stanley, including the investment adviser and its investment teams, may have obligations to other clients or investors in Affiliated
Investment Accounts, the fulfillment of which may not be in the best interests of a Fund or its shareholders. A Fund’s investment
objectives may overlap with the investment objectives of certain Affiliated Investment Accounts. As a result, the members of an
investment team may face conflicts in the allocation of suitable investment opportunities among a Fund and other investment funds,
programs, accounts and businesses advised by or affiliated with the investment adviser. Certain Affiliated Investment Accounts
may provide for higher management or incentive fees or greater expense reimbursements or overhead allocations, all of which may
contribute to this conflict of interest and create an incentive for the investment adviser to favor such other accounts.
Morgan Stanley currently invests and plans to continue to invest on its
own behalf and on behalf of its Affiliated Investment Accounts in a wide variety of investment opportunities globally. Morgan Stanley
and its Affiliated Investment Accounts, to the extent consistent with applicable law and policies and procedures, will be permitted
to invest in investment opportunities without making such opportunities available to a Fund beforehand. Subject to the foregoing,
Morgan Stanley may offer
investments that fall into the investment objectives of an Affiliated
Investment Account to such account or make such investment on its own behalf, even though such investment also falls within a Fund’s
investment objectives. A Fund may invest in opportunities that Morgan Stanley and/or one or more Affiliated Investment Accounts
has declined, and vice versa. All of the foregoing may reduce the number of investment opportunities available to a Fund and may
create conflicts of interest in allocating investment opportunities. Investors should note that the conflicts inherent in making
such allocation decisions may not always be resolved to a Fund’s advantage. There can be no assurance that a Fund will have
an opportunity to participate in certain opportunities that fall within their investment objectives.
To seek to reduce potential conflicts of interest and to attempt to allocate
such investment opportunities in a fair and equitable manner, the investment adviser has implemented allocation policies and procedures.
These policies and procedures are intended to give all clients of the investment adviser, including the Funds, fair access to investment
opportunities consistent with the requirements of organizational documents, investment strategies, applicable laws and regulations,
and the fiduciary duties of the investment adviser. Each client of the investment adviser that is subject to the allocation policies
and procedures, including each Fund, is assigned an investment team and portfolio manager(s) by the investment adviser. The investment
team and portfolio managers review investment opportunities and will decide with respect to the allocation of each opportunity
considering various factors and in accordance with the allocation policies and procedures. The allocation policies and procedures
are subject to change. Investors should note that the conflicts inherent in making such allocation decisions may not always be
resolved to the advantage of a Fund.
It is possible that Morgan Stanley or an Affiliated Investment Account,
including another Eaton Vance fund, will invest in or advise a company that is or becomes a competitor of a company of which a
Fund holds an investment. Such investment could create a conflict between the Fund, on the one hand, and Morgan Stanley or the
Affiliated Investment Account, on the other hand. In such a situation, Morgan Stanley may also have a conflict in the allocation
of its own resources to the portfolio investment. Furthermore, certain Affiliated Investment Accounts will be focused primarily
on investing in other funds which may have strategies that overlap and/or directly conflict and compete with a Fund.
In addition, certain investment professionals who are involved in a Fund’s
activities remain responsible for the investment activities of other Affiliated Investment Accounts managed by the investment adviser
and its affiliates, and they will devote time to the management of such investments and other newly created Affiliated Investment
Accounts (whether in the form of funds, separate accounts or other vehicles), as well as their own investments. In addition, in
connection with the management of investments for other Affiliated Investment Accounts, members of Morgan Stanley and its affiliates
may serve on the boards of directors of or advise companies which may compete with a Fund’s portfolio investments. Moreover,
these Affiliated Investment Accounts managed by Morgan Stanley and its affiliates may pursue investment opportunities that may
also be suitable for a Fund.
It should be noted that Morgan Stanley may, directly or indirectly, make
large investments in certain of its Affiliated Investment Accounts, and accordingly Morgan Stanley’s investment in a Fund
may not be a determining factor in the outcome of any of the foregoing conflicts. Nothing herein restricts or in any way limits
the activities of Morgan Stanley, including its ability to buy or sell interests in, or provide financing to, equity and/or debt
instruments, funds or portfolio companies, for its own accounts or for the accounts of Affiliated Investment Accounts or other
investment funds or clients in accordance with applicable law.
Different clients of the investment adviser, including a Fund, may invest
in different classes of securities of the same issuer, depending on the respective clients’ investment objectives and policies.
As a result, the investment adviser and its affiliates, at times, will seek to satisfy fiduciary obligations to certain clients
owning one class of securities of a particular issuer by pursuing or enforcing rights on behalf of those clients with respect to
such class of securities, and those activities may have an adverse effect on another client which owns a different class of securities
of such issuer. For example, if one client holds debt securities of an issuer and another client holds equity securities of the
same issuer, if the issuer experiences financial or operational challenges, the investment adviser and its affiliates may seek
a liquidation of the issuer on behalf of the client that holds the debt securities, whereas the client holding the equity securities
may benefit from a reorganization of the issuer. Thus, in such situations, the actions taken by the investment adviser or its affiliates
on behalf of one client can negatively impact securities held by another client. These conflicts also exist as between the investment
adviser’s clients, including the Funds, and the Affiliated Investment Accounts managed by Morgan Stanley.
The investment adviser and its affiliates may give advice and recommend
securities to other clients which may differ from advice given to, or securities recommended or bought for, a Fund even though
such other clients’ investment objectives may be similar to those of the Fund.
The investment adviser and its affiliates manage long and short portfolios.
The simultaneous management of long and short portfolios creates conflicts of interest in portfolio management and trading in that
opposite directional positions may be taken in client accounts managed by the same investment team, and creates risks such as:
(i) the risk that short sale activity could adversely affect the market value of long positions in one or more portfolios (and
vice versa) and (ii) the risks associated with the trading desk receiving opposing orders in the same security simultaneously.
The investment adviser and its affiliates have
adopted policies and procedures that are reasonably designed to mitigate
these conflicts. In certain circumstances, the investment adviser invest on behalf of itself in securities and other instruments
that would be appropriate for, held by, or may fall within the investment guidelines of its clients, including a Fund. At times,
the investment adviser will give advice or take action for its own accounts that differs from, conflicts with, or is adverse to
advice given or action taken for any client.
From time to time, conflicts also arise due to the fact that certain securities
or instruments maybe held in some client accounts, including a Fund, but not in others, or the client accounts may have different
levels of holdings in certain securities or instruments, and because the accounts pay different levels of fees to the investment
adviser. In addition, at times an investment adviser investment team will give advice or take action with respect to the investments
of one or more clients that is not given or taken with respect to other clients with similar investment programs, objectives, and
strategies. Accordingly, clients with similar strategies will not always hold the same securities or instruments or achieve the
same performance. The investment adviser’s investment teams also advise clients with conflicting programs, objectives or
strategies. These conflicts also exist as between the investment adviser’s clients, including the Funds, and the Affiliated
Investment Accounts managed by Morgan Stanley.
The investment adviser maintains separate trading desks by investment
team and generally based on asset class, including two trading desks trading equity securities. These trading desks operate independently
of one another. The two equity trading desks do not share information. The separate equity trading desks may result in one desk
competing against the other desk when implementing buy and sell transactions, possibly causing certain accounts to pay more or
receive less for a security than other accounts. In addition, Morgan Stanley and its affiliates maintain separate trading desks
that operate independently of each other and do not share information with the investment adviser. The Morgan Stanley and affiliate
trading desks may compete against the investment adviser trading desks when implementing buy and sell transactions, possibly causing
certain Affiliated Investment Accounts to pay more or receive less for a security than other Affiliated Investment Accounts.
Payments to Broker-Dealers
and Other Financial Intermediaries. The investment adviser and/or EVD may pay compensation, out of their own funds and not
as an expense of the Funds, to certain financial intermediaries (which may include affiliates of the investment adviser and EVD),
including recordkeepers and administrators of various deferred compensation plans, in connection with the sale, distribution, marketing
and retention of shares of the Funds and/or shareholder servicing. For example, the investment adviser or EVD may pay additional
compensation to a financial intermediary for, among other things, promoting the sale and distribution of Fund shares, providing
access to various programs, mutual fund platforms or preferred or recommended mutual fund lists that may be offered by a financial
intermediary, granting EVD access to a financial intermediary’s financial advisors and consultants, providing assistance
in the ongoing education and training of a financial intermediary’s financial personnel, furnishing marketing support, maintaining
share balances and/or for sub-accounting, recordkeeping, administrative, shareholder or transaction processing services. Such payments
are in addition to any distribution fees, shareholder servicing fees and/or transfer agency fees that may be payable by the Funds.
The additional payments may be based on various factors, including level of sales (based on gross or net sales or some specified
minimum sales or some other similar criteria related to sales of the Funds and/or some or all other Eaton Vance funds), amount
of assets invested by the financial intermediary’s customers (which could include current or aged assets of the Funds and/or
some or all other Eaton Vance funds), a Fund’s advisory fee, some other agreed upon amount or other measures as determined
from time to time by the investment adviser and/or EVD. The amount of these payments may be different for different financial intermediaries.
The prospect of receiving, or the receipt of, additional compensation,
as described above, by financial intermediaries may provide such financial intermediaries and their financial advisors and other
salespersons with an incentive to favor sales of shares of the Funds over other investment options with respect to which these
financial intermediaries do not receive additional compensation (or receives lower levels of additional compensation). These payment
arrangements, however, will not change the price that an investor pays for shares of the Funds or the amount that the Funds receive
to invest on behalf of an investor. Investors may wish to take such payment arrangements into account when considering and evaluating
any recommendations relating to Fund shares and should review carefully any disclosures provided by financial intermediaries as
to their compensation.
Morgan Stanley Trading
and Principal Investing Activities. Notwithstanding anything to the contrary herein, Morgan Stanley will generally conduct
its sales and trading businesses, publish research and analysis, and render investment advice without regard for a Fund’s
holdings, although these activities could have an adverse impact on the value of one or more of the Fund’s investments, or
could cause Morgan Stanley to have an interest in one or more portfolio investments that is different from, and potentially adverse
to that of a Fund. Furthermore, from time to time, the investment adviser or its affiliates may invest “seed” capital
in a Fund, typically to enable the Fund to commence investment operations and/or achieve sufficient scale. The investment adviser
and its affiliates may hedge such seed capital exposure by investing in derivatives or other instruments expected to produce offsetting
exposure. Such hedging transactions, if any, would occur outside of a Fund.
Morgan Stanley’s sales and trading, financing and principal investing
businesses (whether or not specifically identified as such, and including Morgan Stanley’s trading and principal investing
businesses) will not be required to offer any investment opportunities to a Fund. These businesses may encompass, among other things,
principal trading activities as well as principal investing.
Morgan Stanley’s sales and trading, financing and principal investing
businesses have acquired or invested in, and in the future may acquire or invest in, minority and/or majority control positions
in equity or debt instruments of diverse public and/or private companies. Such activities may put Morgan Stanley in a position
to exercise contractual, voting or creditor rights, or management or other control with respect to securities or loans of portfolio
investments or other issuers, and in these instances Morgan Stanley may, in its discretion and subject to applicable law, act to
protect its own interests or interests of clients, and not a Fund’s interests.
Subject to the limitations of applicable law, a Fund may purchase from
or sell assets to, or make investments in, companies in which Morgan Stanley has or may acquire an interest, including as an owner,
creditor or counterparty.
Morgan Stanley’s
Investment Banking Activities. Morgan Stanley advises clients on a variety of mergers, acquisitions, restructuring, bankruptcy
and financing transactions. Morgan Stanley may act as an advisor to clients, including other investment funds that may compete
with a Fund and with respect to investments that a Fund may hold. Morgan Stanley may give advice and take action with respect to
any of its clients or proprietary accounts that may differ from the advice given, or may involve an action of a different timing
or nature than the action taken, by a Fund. Morgan Stanley may give advice and provide recommendations to persons competing with
a Fund and/or any of a Fund’s investments that are contrary to the Fund’s best interests and/or the best interests
of any of its investments.
Morgan Stanley could be engaged in financial advising, whether on the
buy-side or sell-side, or in financing or lending assignments that could result in Morgan Stanley’s determining in its discretion
or being required to act exclusively on behalf of one or more third parties, which could limit a Fund’s ability to transact
with respect to one or more existing or potential investments. Morgan Stanley may have relationships with third-party funds, companies
or investors who may have invested in or may look to invest in portfolio companies, and there could be conflicts between a Fund’s
best interests, on the one hand, and the interests of a Morgan Stanley client or counterparty, on the other hand.
To the extent that Morgan Stanley advises creditor or debtor companies
in the financial restructuring of companies either prior to or after filing for protection under Chapter 11 of the U.S. Bankruptcy
Code or similar laws in other jurisdictions, the investment adviser’s flexibility in making investments in such restructurings
on a Fund’s behalf may be limited. Morgan Stanley could provide investment banking services to competitors of portfolio companies,
as well as to private equity and/or private credit funds; such activities may present Morgan Stanley with a conflict of interest
vis-a-vis a Fund’s investment and may also result in a conflict in respect of the allocation of investment banking resources
to portfolio companies.
To the extent permitted by applicable law, Morgan Stanley may provide
a broad range of financial services to companies in which a Fund invests, including strategic and financial advisory services,
interim acquisition financing and other lending and underwriting or placement of securities, and Morgan Stanley generally will
be paid fees (that may include warrants or other securities) for such services. Morgan Stanley will not share any of the foregoing
interest, fees and other compensation received by it (including, for the avoidance of doubt, amounts received by the investment
adviser) with a Fund, and any advisory fees payable will not be reduced thereby.
Morgan Stanley may be engaged to act as a financial advisor to a company
in connection with the sale of such company, or subsidiaries or divisions thereof, may represent potential buyers of businesses
through its mergers and acquisition activities and may provide lending and other related financing services in connection with
such transactions. Morgan Stanley’s compensation for such activities is usually based upon realized consideration and is
usually contingent, in substantial part, upon the closing of the transaction. Under these circumstances, a Fund may be precluded
from participating in a transaction with or relating to the company being sold or participating in any financing activity related
to merger or acquisition.
To meet applicable regulatory requirements, there are periods when the
investment adviser will not engage in certain types of transactions in the securities of companies for which a broker-dealer affiliated
with Morgan Stanley is performing investment banking services. Fund shareholders will not receive notice of such instances. In
particular, when a broker-dealer affiliated with Morgan Stanley is engaged in an underwriting or other distribution of securities
of a company, the investment adviser may be prohibited from purchasing such securities on behalf of a Fund. In addition, under
certain circumstances, the investment adviser generally will not initiate transactions in the securities of companies with respect
to which affiliates of the investment adviser may have controlling interests or are affiliated.
The investment adviser believes that the nature and range of clients to
whom Morgan Stanley and its subsidiaries render investment banking and other services is such that it would be inadvisable to exclude
these companies from the Fund’s portfolio.
Morgan Stanley’s
Marketing Activities. Morgan Stanley is engaged in the business of underwriting, syndicating, brokering, administering,
servicing, arranging and advising on the distribution of a wide variety of securities and other investments in which a Fund may
invest. Subject to the restrictions of the 1940 Act, including Sections 10(f) and 17(e) thereof, a Fund may invest in transactions
in which Morgan Stanley acts as underwriter, placement agent, syndicator, broker, administrative agent, servicer, advisor, arranger
or structuring agent and receives fees or other compensation from the sponsors of such products or securities. Any fees earned
by Morgan Stanley in such capacity will not be shared with the investment adviser or the Funds. Certain conflicts of interest,
in addition to the receipt of fees or other compensation, would be inherent in these transactions. Moreover, the interests of one
of Morgan Stanley’s clients with respect to an issuer of securities in which a Fund has an investment may be adverse to the
investment adviser’s or a Fund’s best interests. In conducting the foregoing activities, Morgan Stanley will be acting
for its other clients and will have no obligation to act in the investment adviser’s or a Fund’s best interests.
Client Relationships.
Morgan Stanley has existing and potential relationships with a significant number of corporations, institutions and individuals.
In providing services to its clients, Morgan Stanley may face conflicts of interest with respect to activities recommended to or
performed for such clients, on the one hand, and a Fund, its shareholders or the entities in which the Fund invests, on the other
hand. In addition, these client relationships may present conflicts of interest in determining whether to offer certain investment
opportunities to a Fund.
In acting as principal or in providing advisory and other services to
its other clients, Morgan Stanley may engage in or recommend activities with respect to a particular matter that conflict with
or are different from activities engaged in or recommended by the investment adviser on a Fund’s behalf.
Principal Investments.
To the extent permitted by applicable law, there may be situations in which a Fund’s’ interests may conflict
with the interests of one or more general accounts of Morgan Stanley and its affiliates or accounts managed by Morgan Stanley or
its affiliates. This may occur because these accounts hold public and private debt and equity securities of many issuers which
may be or become portfolio companies, or from whom portfolio companies may be acquired.
Transactions with
Portfolio Companies of Affiliated Investment Accounts. The companies in which a Fund may invest may be counterparties to
or participants in agreements, transactions or other arrangements with portfolio companies or other entities of portfolio investments
of Affiliated Investment Accounts (for example, a company in which a Fund invests may retain a company in which an Affiliated Investment
Account invests to provide services or may acquire an asset from such company or vice versa). Certain of these agreements, transactions
and arrangements involve fees, servicing payments, rebates and/or other benefits to Morgan Stanley or its affiliates. For example,
portfolio entities may, including at the encouragement of Morgan Stanley, enter into agreements regarding group procurement and/or
vendor discounts. Morgan Stanley and its affiliates may also participate in these agreements and may realize better pricing or
discounts as a result of the participation of portfolio entities. To the extent permitted by applicable law, certain of these agreements
may provide for commissions or similar payments and/or discounts or rebates to be paid to a portfolio entity of an Affiliated Investment
Account, and such payments or discounts or rebates may also be made directly to Morgan Stanley or its affiliates. Under these arrangements,
a particular portfolio company or other entity may benefit to a greater degree than the other participants, and the funds, investment
vehicles and accounts (which may or may not include a Fund) that own an interest in such entity will receive a greater relative
benefit from the arrangements than the Eaton Vance funds, investment vehicles or accounts that do not own an interest therein.
Fees and compensation received by portfolio companies of Affiliated Investment Accounts in relation to the foregoing will not be
shared with a Fund or offset advisory fees payable.
Investments in Portfolio
Investments of Other Funds. To the extent permitted by applicable law, when a Fund invests in certain companies or other
entities, other funds affiliated with the investment adviser may have made or may be making an investment in such companies or
other entities. Other funds that have been or may be managed by the investment adviser may invest in the companies or other entities
in which a Fund has made an investment. Under such circumstances, a Fund and such other funds may have conflicts of interest (e.g.,
over the terms, exit strategies and related matters, including the exercise of remedies of their respective investments). If the
interests held by a Fund are different from (or take priority over) those held by such other funds, the investment adviser may
be required to make a selection at the time of conflicts between the interests held by such other funds and the interests held
by a Fund.
Allocation of Expenses.
Expenses may be incurred that are attributable to a Fund and one or more other Affiliated Investment Accounts (including in connection
with issuers in which a Fund and such other Affiliated Investment Accounts have overlapping investments). The allocation of such
expenses among such entities raises potential conflicts of interest. The investment adviser and its affiliates intend to allocate
such common expenses among a Fund and any such other Affiliated Investment Accounts on a pro rata basis or in such other manner
as the investment adviser deems to be fair and equitable or in such other manner as may be required by applicable law.
Temporary Investments.
To more efficiently invest short-term cash balances held by a Fund, the investment adviser may invest such balances on an
overnight “sweep” basis in shares of one or more money market funds or other short-term vehicles. It is anticipated
that the investment adviser to these money market funds or other short-term vehicles may be the investment adviser (or an affiliate)
to the extent permitted by applicable law, including Rule 12d1-1 under the 1940 Act. The Funds currently invests in Eaton Vance
Cash Reserves Fund, LLC (Cash Reserves Fund), an affiliated investment company managed by Eaton Vance, for this purpose. Eaton
Vance does not currently receive a fee for advisory services provided to Cash Reserves Fund.
Transactions with
Affiliates. The investment adviser and any investment sub-adviser might purchase securities from underwriters or placement
agents in which a Morgan Stanley affiliate is a member of a syndicate or selling group, as a result of which an affiliate might
benefit from the purchase through receipt of a fee or otherwise. Neither the investment adviser nor any investment sub-adviser
will purchase securities on behalf of a Fund from an affiliate that is acting as a manager of a syndicate or selling group. Purchases
by the investment adviser on behalf of a Fund from an affiliate acting as a placement agent must meet the requirements of applicable
law. Furthermore, Morgan Stanley may face conflicts of interest when the Funds use service providers affiliated with Morgan Stanley
because Morgan Stanley receives greater overall fees when they are used.
General Process for
Potential Conflicts. All of the transactions described above involve the potential for conflicts of interest between the
investment adviser, related persons of the investment adviser and/or their clients. The Advisers Act, the 1940 Act and ERISA impose
certain requirements designed to decrease the possibility of conflicts of interest between an investment adviser and its clients.
In some cases, transactions may be permitted subject to fulfillment of certain conditions. Certain other transactions may be prohibited.
In addition, the investment adviser has instituted policies and procedures designed to prevent conflicts of interest from arising
and, when they do arise, to ensure that it effects transactions for clients in a manner that is consistent with its fiduciary duty
to its clients and in accordance with applicable law. The investment adviser seeks to ensure that potential or actual conflicts
of interest are appropriately resolved taking into consideration the overriding best interests of the client.
EATON VANCE ATLANTA CAPITAL FOCUSED GROWTH FUND
EATON VANCE ATLANTA CAPITAL SELECT EQUITY FUND
EATON VANCE ATLANTA CAPITAL SMID-CAP FUND
Supplement to Prospectus
dated February 1, 2021
1. The following replaces corresponding
disclosure under “Management.” in “Management and Organization”:
Each Fund’s investment adviser is Eaton Vance Management (“Eaton
Vance”). Eaton Vance has offices at Two International Place, Boston, MA 02110. Eaton Vance and its predecessor organizations
have been managing assets since 1924 and managing mutual funds since 1931. Prior to March 1, 2021, Eaton Vance was a wholly owned
subsidiary of Eaton Vance Corp. (“EVC”).
On March 1, 2021, Morgan Stanley acquired EVC (the “Transaction”)
and Eaton Vance became an indirect, wholly-owned subsidiary of Morgan Stanley. In connection with the Transaction, each Fund
each entered into a new investment advisory agreement with Eaton Vance and Eaton Vance entered into a new investment sub-advisory
agreement with Atlanta Capital (as defined below). Each such agreement was approved by shareholders prior to the consummation of
the Transaction and was effective upon its closing.
Morgan Stanley (NYSE: MS), whose principal offices are at 1585 Broadway,
New York, New York 10036, is a preeminent global financial services firm engaged in securities trading and brokerage activities,
as well as providing investment banking, research and analysis, financing and financial advisory services. As of December
31, 2020, after giving effect to the Transaction as described above, Morgan Stanley’s asset management operations had aggregate
assets under management of approximately $1.4 trillion.
Effective March 1, 2021, any fee reduction agreement previously applicable
to a Fund was incorporated into its new investment advisory agreement with its investment adviser and/or its new investment sub-advisory
agreement with its sub-adviser, as applicable.
Pursuant to an investment sub-advisory agreement, the Funds’ adviser
has delegated the investment management of each Fund to Atlanta Capital Management Company, LLC (“Atlanta Capital”),
with offices at 1075 Peachtree Street NE, Suite 2100, Atlanta, GA 30309. The Funds’ adviser pays Atlanta Capital a portion
of the applicable advisory fee for sub-advisory services provided to each Fund. On March 1, 2021, upon the closing of the Transaction,
Atlanta Capital became an indirect wholly owned subsidiary of Morgan Stanley. Prior to March 1, 2021, Atlanta Capital was a majority-owned
affiliate of EVC.
2. The following replaces the
first paragraph under “Payments to Financial Intermediaries.” in “Purchasing Shares”:
Payments to Financial
Intermediaries. In addition to payments disclosed under “Sales Charges” below, the principal underwriter, out
of its own resources, may make cash payments to certain financial intermediaries (which may include affiliates of the principal
underwriter and investment adviser) who provide marketing support, transaction processing and/or administrative services and, in
some cases, include some or all Eaton Vance funds in preferred or specialized selling programs. Payments made by the principal
underwriter to a financial intermediary may be significant and are typically in the form of fees based on Fund sales, assets, transactions
processed and/or accounts attributable to that financial intermediary. Financial intermediaries also may receive amounts from the
principal underwriter in connection with educational or due diligence meetings that include information concerning Eaton Vance
funds. The principal underwriter may pay or allow other promotional incentives or payments to financial intermediaries to the extent
permitted by applicable laws and regulations.
3. The following replaces “Fund
Purchases through Edward D. Jones & Co., L.P. (“Edward Jones”)” under “Appendix A – Financial
Intermediary Sales Charge Variations”:
Policies Regarding Transactions Through Edward
D. Jones & Co., L.P. (“Edward Jones”)
The following information has been provided by Edward Jones:
Effective on or after March 1, 2021, the following information supersedes
prior information with respect to transactions and positions held in fund shares through an Edward Jones system. Clients of Edward
Jones (also referred to as “shareholders”) purchasing fund shares on the Edward Jones commission and fee-based platforms
are eligible only for the following sales charge discounts (also referred to as “breakpoints”) and waivers, which can
differ from discounts and waivers described elsewhere in the mutual fund prospectus or statement of additional information (“SAI”)
or through another broker-dealer. In all instances, it is the shareholder's responsibility to inform Edward Jones at the time of
purchase of any relationship, holdings of fund family or other facts qualifying the purchaser for discounts or waivers. Edward
Jones can ask for documentation from the shareholder of such circumstance. Shareholders should contact Edward Jones if they have
questions regarding their eligibility for these discounts and waivers.
Breakpoints
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Breakpoint pricing, otherwise known as volume pricing, at dollar thresholds as described in the prospectus.
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Rights of Accumulation (“ROA”)
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The applicable sales charge on a purchase of Class A shares is determined by taking into account all share classes (except
certain money market funds and any assets held in group retirement plans) of the mutual fund family held by the shareholder or
in an account grouped by Edward Jones with other accounts for the purpose of providing certain pricing considerations (“pricing
groups”). If grouping assets as a shareholder, this includes all share classes held on the Edward Jones platform and/or held
on another platform. The inclusion of eligible fund family assets in the ROA calculation is dependent on the shareholder notifying
Edward Jones of such assets at the time of calculation. Money market funds are included only if such shares were sold with a sales
charge at the time of purchase or acquired in exchange for shares purchased with a sales charge.
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The employer maintaining a SEP IRA plan and/or SIMPLE IRA plan may elect to establish or change ROA for the IRA accounts associated
with the plan to a plan-level grouping as opposed to including all share classes at a shareholder or pricing group level.
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ROA is determined by calculating the higher of cost minus redemptions or market value (current shares x NAV).
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Letter of Intent (“LOI”)
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Through a LOI, shareholders can receive the sales charge and breakpoint discounts for purchases shareholders intend to make
over a 13-month period from the date Edward Jones receives the LOI. The LOI is determined by calculating the higher of cost or
market value of qualifying holdings at LOI initiation in combination with the value that the shareholder intends to buy over a
13-month period to calculate the front-end sales charge and any breakpoint discounts. Each purchase the shareholder makes during
that 13-month period will receive the sales charge and breakpoint discount that applies to the total amount. If during the 13-month
period the shareholder redeems any of the shares purchased pursuant to a LOI, the value of the redeemed shares will not be included
for purposes of satisfying the LOI. The inclusion of eligible fund family assets in the LOI calculation is dependent on the shareholder
notifying Edward Jones of such assets at the time of calculation. Purchases made before the LOI is received by Edward Jones are
not adjusted under the LOI and will not reduce the sales charge previously paid. Sales charges will be adjusted if LOI is not met.
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If the employer maintaining a SEP IRA plan and/or SIMPLE IRA plan has elected to establish or change ROA for the IRA accounts
associated with the plan to a plan-level grouping, LOIs will also be at the plan-level and may only be established by the employer.
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Front-end Sales Charge Waivers
Sales charges are waived for the following shareholders and
in the following situations:
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Associates of Edward Jones and its affiliates and their family members who are in the same pricing group (as determined by
Edward Jones under its policies and procedures) as the associate. This waiver will continue for the remainder of the associate's
life if the associate retires from Edward Jones in good-standing and remains in good standing pursuant to Edward Jones' policies
and procedures.
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Shares purchased in an Edward Jones fee-based program.
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Shares purchased through reinvestment of capital gains distributions and dividend reinvestment.
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Shares purchased from the proceeds of redeemed shares of the same fund family so long as the following conditions are met:
1) the proceeds are from the sale of shares within 60 days of the purchase, and 2) the sale and purchase are made in the same share
class and the same account or the purchase is made in an individual retirement account with proceeds from liquidations in a non-retirement
account.
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Shares exchanged into Class A shares from another share class so long as the exchange is into the same fund and was initiated
at the discretion of Edward Jones. Edward Jones is responsible for any remaining Contingent Deferred Sales Charge (“CDSC”)
due to the fund company or its affiliate, if applicable. Any future purchases are subject to the applicable sales charge as disclosed
in the prospectus.
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Exchanges from Class C shares to Class A shares of the same fund, generally, in the 84th month following the anniversary of
the purchase date or earlier at the discretion of Edward Jones.
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CDSC Waivers
If the shareholder purchases shares that are subject to a CDSC
and those shares are redeemed before the CDSC is expired, the shareholder is responsible to pay the CDSC except in the following
conditions:
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The death or disability of the shareholder.
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Systematic withdrawals with up to 10% per year of the account value.
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Return of excess contributions from an Individual Retirement Account (IRA).
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Shares sold as part of a required minimum distribution for IRA and retirement accounts if the redemption is taken in or after
the year the shareholder reaches qualified age based on applicable IRS regulations.
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Shares sold to pay Edward Jones fees or costs in such cases where the transaction is initiated by Edward Jones. Edward Jones
is responsible for any remaining CDSC due to the fund company or its affiliate, if applicable.
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Shares exchanged in an Edward Jones fee-based program. Edward Jones is responsible for any remaining CDSC due to the fund company
or its affiliate, if applicable.
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Shares acquired through NAV reinstatement.
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Shares redeemed at the discretion of Edward Jones for Minimum Balances as described below.
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Other Important Information Regarding Transactions Through Edward Jones
Minimum Purchase Amounts
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Initial purchase minimum: $250
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Subsequent purchase minimum: none
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Minimum Balances
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Edward Jones has the right to redeem at its discretion fund holdings with a balance of $250 or less. The following are examples
of accounts that are not included in this policy:
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A fee-based account held on an Edward Jones platform
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A 529 account held on an Edward Jones platform
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An account with an active systematic investment plan or LOI
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Exchanging Share Classes
At any time it deems necessary, Edward Jones has the authority to exchange
at NAV a shareholder's holdings in a fund to Class A shares of the same fund. Edward Jones is responsible for any remaining CDSC
due to the fund company or its affiliate, if applicable. Any future purchases are subject to the applicable sales charge as disclosed
in the prospectus.
March 1, 2021
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37965 3.1.21
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EATON VANCE ATLANTA CAPITAL FOCUSED GROWTH FUND
EATON VANCE ATLANTA CAPITAL SELECT EQUITY FUND
EATON VANCE ATLANTA CAPITAL SMID-CAP FUND
Supplement to Statement of Additional Information
dated February 1, 2021
1. The following replaces the
first paragraph under “Fund Management.” in “Management and Organization”:
Fund Management.
The Trustees of the Trust are responsible for the overall management and supervision of the affairs
of the Trust. The Board members and officers of the Trust are listed below. Except as indicated, each individual has held the office
shown or other offices in the same company for the last five years. Board members hold indefinite terms of office. Each Trustee
holds office until his or her successor is elected and qualified, subject to a prior death, resignation, retirement, disqualification
or removal. Under the terms of each Fund’s Trustee retirement policy, an Independent Trustee must retire and resign
as a Trustee on the earlier of: (i) the first day of July following his or her 74th birthday; or (ii), with limited exception,
December 31st of the 20th year in which he or she has served as a Trustee. However, if such retirement and resignation would cause
each Fund to be out of compliance with Section 16 of the 1940 Act or any other regulations or guidance of the SEC, then such
retirement and resignation will not become effective until such time as action has been taken for each Fund to be in compliance
therewith. The “noninterested Trustees” consist of those Trustees who are not “interested persons” of the
Trust, as that term is defined under the 1940 Act. The business address of each Board member and officer is Two International Place,
Boston, Massachusetts 02110. As used in this SAI, “EVC” refers to Eaton Vance Corp., “EV” refers to Eaton
Vance, Inc., “Eaton Vance” refers to Eaton Vance Management and “EVD” refers to Eaton Vance Distributors,
Inc. (see “Principal Underwriter” under “Other Service Providers”). EV is the trustee of each of Eaton
Vance and BMR. Effective March 1, 2021, each of Eaton Vance, BMR, EVD and EV are indirect wholly-owned subsidiaries of Morgan Stanley.
Each officer affiliated with Eaton Vance may hold a position with other Eaton Vance affiliates that is comparable to his or her
position with Eaton Vance listed below.
2. The following replaces the
Thomas E. Faust Jr. row in the Trustees table and in his biographical narrative in “Management and Organization”:
THOMAS E. FAUST JR.
1958
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Trustee
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Since 2007
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Chairman of Morgan Stanley Investment Management, Inc. (MSIM), Director and President of EV, Chief Executive Officer and President of Eaton Vance and BMR, and Director of EVD. Formerly, Chairman, Chief Executive Officer and President of EVC. Trustee and/or officer of 141 registered investment companies. Mr. Faust is an interested person because of his positions with MSIM, BMR, Eaton Vance, EVD and EV, which are affiliates of the Trust, and his former position with EVC, which was an affiliate of the Trust prior to March 1, 2021.
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141
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Formerly, Director of EVC (2007-2021) and Hexavest Inc. (2012-2021) (investment management firm).
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Thomas E. Faust
Jr. Mr. Faust has served as a member of the Eaton Vance Fund Boards since 2007. Effective March 1, 2021, he is Chairman
of MSIM. He is also Director and President of EV, Chief Executive Officer and President of Eaton Vance and BMR, and Director of
EVD. Mr. Faust previously served as Chairman and Chief Executive Officer of EVC from 2007 through March 1, 2021 and as President
of EVC from 2006 through March 1, 2021. Mr. Faust served as a Director of Hexavest Inc. from 2012-2021. From 2016 through 2019,
Mr. Faust served as a Director of SigFig Wealth Management LLC. Mr. Faust previously served as an equity analyst, portfolio manager,
Director of Equity Research and Management and Chief Investment Officer of Eaton Vance from 1985-2007. He holds B.S. degrees in
Mechanical Engineering and Economics from the Massachusetts Institute of Technology and an MBA from Harvard Business School. Mr.
Faust has been a Chartered Financial Analyst since 1988. He is a trustee and member of the executive committee of the Boston Symphony
Orchestra, Inc. and trustee emeritus of Wellesley College.
3. The following is added as
the first paragraph under “Investment Advisory Services” in “Investment Advisory and Administrative Services”:
As described in the Prospectus, upon the closing of the transaction by
which Morgan Stanley acquired EVC (the “Transaction”), each Fund entered into a new investment advisory agreement or
investment advisory and administrative agreement with Eaton Vance or BMR, as applicable, and Eaton Vance or BMR entered into a
new investment sub-advisory agreement with Atlanta Capital, as applicable.
4. The following replaces the
last paragraph under “Investment Advisory and Administrative Services.” in “Investment Advisory and Administrative
Services”:
Each Investment Advisory Agreement or Investment Advisory and Administrative
Agreement and Investment Sub-Advisory Agreement with the investment adviser or sub-adviser continues in effect through and including
the second anniversary of its execution and shall continue in full force and effect indefinitely thereafter, but only so long as
such continuance after such second anniversary is specifically approved at least annually (i) by the vote of a majority of the
noninterested Trustees of the Trust, cast in person at a meeting specifically called for the purpose of
voting on such approval and (ii) by the Board of the Trust, or by vote
of a majority of the outstanding voting securities of the Fund. Each Agreement may be terminated at any time without penalty on
sixty (60) days’ written notice by either party, or by vote of the majority of the outstanding voting securities of the Fund,
and each Agreement will terminate automatically in the event of its assignment. Each Agreement provides that the investment
adviser may render services to others. Each Agreement also provides that the investment adviser shall not be liable for any loss
incurred in connection with the performance of its duties, or action taken or omitted under the Agreement, in the absence of willful
misfeasance, bad faith, gross negligence or reckless disregard of its obligations and duties thereunder, or for any losses sustained
in the acquisition, holding or disposition of any security or other investment. Each Agreement is not intended to, and does not,
confer upon any person not a party to it any right, benefit or remedy of any nature, except that the new sub-advisory agreements
with Atlanta Capital (as described above) state that each Fund is a third party beneficiary of such agreement.
5. The following replaces “Information
About Eaton Vance.” in “Investment Advisory and Administrative Services”:
Information About
BMR and Eaton Vance. BMR and Eaton Vance are business trusts organized under the laws of the Commonwealth of Massachusetts.
EV serves as trustee of BMR and Eaton Vance. As described in the Prospectus, following the closing of the Transaction on March
1, 2021, EV, Eaton Vance and BMR became indirect wholly-owned subsidiaries of Morgan Stanley (NYSE: MS), a preeminent global financial
services firm engaged in securities trading and brokerage activities, as well as providing investment banking, research and analysis,
financing and financial advisory services.
Prior to March 1, 2021, EV and Eaton Vance were wholly-owned subsidiaries
of EVC, a Maryland corporation and publicly-held holding company and BMR was an indirect wholly owned subsidiary of EVC. EVC through
its subsidiaries and affiliates engaged primarily in investment management, administration and marketing activities. The Directors
of EVC were Thomas E. Faust Jr., Ann E. Berman, Leo I. Higdon, Jr., Paula A. Johnson, Brian D. Langstraat, Dorothy E. Puhy, Winthrop
H. Smith, Jr. and Richard A. Spillane, Jr. All shares of the outstanding Voting Common Stock of EVC were deposited in a Voting
Trust, the Voting Trustees of which were Mr. Faust, Paul W. Bouchey, Craig R. Brandon, Daniel C. Cataldo, Michael A. Cirami, Cynthia
J. Clemson, James H. Evans, Maureen A. Gemma, Laurie G. Hylton, Mr. Langstraat, Thomas Lee, Frederick S. Marius, David C. McCabe,
Edward J. Perkin, Lewis R. Piantedosi, Charles B. Reed, Craig P. Russ, Thomas C. Seto, John L. Shea, Eric A. Stein, John H. Streur,
Andrew N. Sveen, Payson F. Swaffield, R. Kelly Williams and Matthew J. Witkos (all of whom are or were officers of Eaton Vance
or its affiliates). The Voting Trustees had unrestricted voting rights for the election of Directors of EVC. Prior to March 1,
2021, all of the outstanding voting trust receipts issued under said Voting Trust were owned by certain of the officers of BMR
and Eaton Vance who may also have been officers, or officers and Directors of EVC and EV. As indicated under “Management
and Organization,” all of the officers of the Trust (as well as Mr. Faust who is also a Trustee) are employees of Eaton Vance
and/or BMR.
6. The following replaces “Information
About Atlanta Capital.” in “Investment Advisory and Administrative Services”:
Information About
Atlanta Capital. Atlanta Capital is an Atlanta, Georgia based equity and fixed income manager with a primary focus on separate
account management for institutional clients. Atlanta Capital was founded in 1969 as a registered investment adviser. As described
in the Prospectus, following the closing of the Transaction on March 1, 2021, Atlanta Capital became an indirect, wholly owned
subsidiary of Morgan Stanley. Prior to March 1, 2021, Atlanta Capital was a majority owned affiliate of EVC.
7. The following replaces “Compensation
Structure for Atlanta Capital.” and “Method used by Atlanta Capital to Determine Compensation.” in “Investment
Advisory and Administrative Services”:
Compensation Structure
for Atlanta Capital. Compensation of Atlanta Capital portfolio managers (Atlanta Capital does not employ analysts)
has three primary components: (1) a base salary, (2) an annual cash bonus, and (3) annual stock-based compensation consisting of
restricted shares of Morgan Stanley stock that are subject to a fixed vesting and distribution schedule, and grants of profit participation
interests and/or phantom incentive units in Atlanta Capital. The portfolio managers also receive certain retirement, insurance
and other benefits that are broadly available to Atlanta Capital employees. Compensation of the portfolio managers is reviewed
primarily on an annual basis. Cash bonuses, stock-based compensation awards, and adjustments in base salary are typically paid
or put into effect at or shortly after the December 31st fiscal year end of Morgan Stanley. The long-term portions of compensation
including restricted stock awards and Atlanta Capital ownership interests are subject to vesting over a five-year period.
Method used by
Atlanta Capital to Determine Compensation. Atlanta Capital compensates its portfolio managers based primarily on the
scale and complexity of their portfolio responsibilities and the performance of managed funds and accounts. Each portfolio manager
is evaluated based on the composite performance of funds and accounts in each product for which the individual serves on the portfolio
management team. Performance is normally based on periods ending on the June 30th preceding fiscal year end. The primary measures
of management team performance are one-year, three-year, and five-year total return investment performance against product-specific
benchmarks and peer groups, with the heaviest weighting placed on the three-year return. The Focused
Growth Fund is measured against the Russell 1000® Growth Index, the Select Equity Fund is measured against the Russell 1000®
Index, and the SMID-Cap Fund is measured against the Russell 2500™ Index. Fund performance is evaluated primarily against
a peer group of funds as determined by Lipper, Inc. and/or Morningstar, Inc. For managers responsible for multiple funds
and accounts or serving on multiple portfolio management teams, investment performance is evaluated on an aggregate basis, based
on averages or weighted averages among the managed funds and accounts. The performance of accounts for which Atlanta Capital is paid a performance-based incentive fee is not considered
separately or accorded disproportionate weightings in determining portfolio manager incentive compensation.
Atlanta Capital seeks to compensate portfolio managers commensurate with
their responsibilities and performance, and competitive with other firms within the investment management industry. Atlanta Capital
utilizes industry survey data as a factor in determining salary, bonus and stock-based compensation levels for portfolio managers.
Salaries, bonuses and stock-based compensation are also influenced by the operating performance of Atlanta Capital and Morgan Stanley.
The size of the incentive compensation pool available to each investment team is determined each year by Atlanta Capital’s
management team in consultation with Morgan Stanley. While the salaries of Atlanta Capital portfolio managers are comparatively
fixed, cash bonuses and stock-based compensation may fluctuate substantially from year to year, based on changes in manager performance
and other factors as described herein. Atlanta Capital generally expects a substantial portion of portfolio manager compensation
to come in the form of incentives rather than base salary which will vary from team to team and individual to individual.
8. The following replaces the
first two paragraphs in “Other Service Providers”:
Principal Underwriter.
Eaton Vance Distributors, Inc. (“EVD”), Two International Place, Boston, MA 02110 is
the principal underwriter of each Fund. The principal underwriter acts as principal in selling shares under a Distribution Agreement
with the Trust. The expenses of printing copies of prospectuses used to offer shares and other selling literature and of advertising
are borne by the principal underwriter. The fees and expenses of qualifying and registering and maintaining qualifications and
registrations of a Fund and its shares under federal and state securities laws are borne by the Fund. The Distribution Agreement
is renewable annually by the members of the Board (including a majority of the noninterested Trustees who have no direct or indirect
financial interest in the operation of the Distribution Agreement or any applicable Distribution Plan), may be terminated on sixty
days’ notice either by such Trustees or by vote of a majority of the outstanding Fund shares or on six months’ notice
by the principal underwriter and is automatically terminated upon assignment. The principal underwriter distributes shares on a
“best efforts” basis under which it is required to take and pay for only such shares as may be sold. Effective March
1, 2021, EVD is an indirect wholly-owned subsidiary of Morgan Stanley. Prior to March 1, 2021, EVD was a direct, wholly-owned subsidiary
of EVC. Mr. Faust is also a Director of EVD. EVD also serves as placement agent for the Portfolio, if applicable.
Custodian.
State Street Bank and Trust Company (“State Street”), State Street Financial Center,
One Lincoln Street, Boston, MA 02111, serves as custodian to each Fund and Portfolio, if applicable. State Street has custody of
all cash and securities representing a Fund’s interest in the Portfolio, has custody of the Portfolio’s and each
Fund's assets, maintains the general ledger of the Portfolio and each Fund and computes the daily net asset value of interests
in the Portfolio and the net asset value of shares of each Fund. In such capacity it attends to details in connection with the
sale, exchange, substitution, transfer or other dealings with each Fund's and the Portfolio’s investments, receives and disburses
all funds and performs various other ministerial duties upon receipt of proper instructions from the Trust and the Portfolio. State
Street also provides services in connection with the preparation of shareholder reports and the electronic filing of such reports
with the SEC.
9. The following replaces the
corresponding disclosure in “Portfolio Securities Transactions”:
Decisions concerning the execution of portfolio security transactions,
including the selection of the market and the broker-dealer firm or other financial intermediary (each an “intermediary”),
are made by the investment adviser. Each Fund is responsible for the expenses associated with its portfolio transactions. The investment
adviser is also responsible for the execution of transactions for all other accounts managed by it. The investment adviser places
the portfolio security transactions for execution with one or more intermediaries firms. The investment adviser uses its best efforts
to obtain execution of portfolio security transactions at prices that, in the investment adviser’s judgment, are advantageous
to the client and at a reasonably competitive spread or (when a disclosed commission is being charged) at reasonably competitive
commission rates. In seeking such execution, the investment adviser will use its best judgment in evaluating the terms of a transaction,
and will give consideration to various relevant factors, which may include, without limitation, the full range and quality of the
intermediary’s services, responsiveness of the intermediary to the investment adviser, the size and type of the transaction,
the nature and character of the market for the security, the confidentiality, speed and certainty of effective execution required
for the transaction, the general execution and operational capabilities of the intermediary, the reputation, reliability, experience
and financial condition of the intermediary, the value and quality of the services rendered by the intermediary in this and other
transactions, and the amount of the spread or commission, if any. In addition, the investment adviser may consider the receipt
of Research Services (as defined below), provided it does not compromise the investment adviser’s obligation to seek best
overall execution for a Fund and is otherwise in compliance with applicable law. The investment adviser may engage in portfolio
transactions with an intermediary that sells shares of Eaton Vance funds, provided such transactions are not directed to that intermediary
as compensation for the promotion or sale of such shares.
As described in the Prospectus, following the closing of the Transaction
on March 1, 2021, the investment adviser became an “affiliated person,” as defined in the 1940 Act, of Morgan Stanley
and its affiliates, including certain intermediaries (as previously defined). As a result, the investment adviser is subject to
certain restrictions regarding transactions with Morgan Stanley-affiliated intermediaries, as set forth in the 1940 Act. Under
certain circumstances, such restrictions may limit the investment adviser’s ability to place portfolio transactions on behalf
of a Fund at the desired time or price. Any transaction the investment adviser enters into with a Morgan Stanley-affiliated intermediary
on behalf of a Fund will be done in compliance with applicable laws, rules, and regulations; will be subject to any restrictions
contained in a Fund’s investment advisory agreement; will be subject to the investment adviser’s duty to seek best
execution; and, will comply with any applicable policies and procedures of the investment adviser, as described below.
Subject to the overriding objective of obtaining the best execution of
orders and applicable rules and regulations, as described above, a Fund may use an affiliated intermediary, including a Morgan
Stanley-affiliated intermediary, to effect Fund portfolio transactions, including transactions in futures contracts and options
on futures contracts, under procedures adopted by the Board. In order to use such affiliated intermediaries, the Fund’s Board
must approve and periodically review procedures reasonably designed to ensure that commission rates and other remuneration paid
to the affiliated intermediaries are fair and reasonable in comparison to those of other intermediaries for comparable transactions
involving similar securities being purchased or sold during a comparable time period.
Pursuant to an order issued by the SEC, a Fund is permitted to engage in
principal transactions in money market instruments, subject to certain conditions, with Morgan Stanley & Co. LLC, a broker-dealer
affiliated with Morgan Stanley.
Transactions on stock exchanges and other agency transactions involve the
payment of negotiated brokerage commissions. Such commissions vary among different broker-dealer firms, and a particular broker-dealer
may charge different commissions according to such factors as the difficulty and size of the transaction and the volume of business
done with such broker-dealer. Transactions in foreign securities often involve the payment of brokerage commissions, which may
be higher than those in the United States. There is generally no stated commission in the case of securities traded in the over-the-counter
markets including transactions in fixed-income securities which are generally purchased and sold on a net basis (i.e., without
commission) through intermediaries and banks acting for their own account rather than as brokers. Such intermediaries attempt to
profit from such transactions by buying at the bid price and selling at the higher asked price of the market for such obligations,
and the difference between the bid and asked price is customarily referred to as the spread. Fixed-income transactions may also
be transacted directly with the issuer of the obligations. In an underwritten offering the price paid often includes a disclosed
fixed commission or discount retained by the underwriter or dealer. Although spreads or commissions paid on portfolio security
transactions will, in the judgment of the investment adviser, be reasonable in relation to the value of the services provided,
commissions exceeding those which another firm might charge may be paid to intermediaries who were selected to execute transactions
on behalf of the investment adviser’s clients in part for providing brokerage and research services to the investment adviser
as permitted by applicable law.
Research Services provided by (and produced by) broker-dealers that execute
portfolio transactions or from affiliates of executing broker-dealers are referred to as “Proprietary Research.” Except
for trades executed in jurisdictions where such consideration is not permissible, the investment adviser may and does consider
the receipt of Proprietary Research Services as a factor in selecting broker dealers to execute client portfolio transactions,
provided it does not compromise the investment adviser’s obligation to seek best overall execution. In jurisdictions where
permissible, the investment adviser also may consider the receipt of Research Services under so called “client commission
arrangements” or “commission sharing arrangements” (both referred to as “CCAs”) as a factor in selecting
broker dealers to execute transactions, provided it does not compromise the investment adviser’s obligation to seek best
overall execution. Under a CCA arrangement, the investment adviser may cause client accounts to effect transactions through a broker-dealer
and request that the broker-dealer allocate a portion of the commissions paid on those transactions to a pool of commission credits
that are paid to other firms that provide Research Services to the investment adviser. Under a CCA, the broker-dealer that provides
the Research Services need not execute the trade. Participating in CCAs may enable the investment adviser to consolidate payments
for research using accumulated client commission credits from transactions executed through a particular broker-dealer to periodically
pay for Research Services obtained from and provided by other firms, including other broker-dealers that supply Research Services.
The investment adviser believes that CCAs offer the potential to optimize the execution of trades and the acquisition of a variety
of high quality Research Services that the investment adviser might not be provided access to absent CCAs. The investment adviser
may enter into CCA arrangements with a number of broker-dealers and other firms, including certain affiliates of the investment
adviser. The investment adviser will only enter into and utilize CCAs to the extent permitted by Section 28(e) and other applicable
law.
The investment companies sponsored by the investment adviser or certain
of its affiliates also may allocate brokerage commissions to acquire information relating to the
performance, fees and expenses of such companies and other investment companies, which information is used by the members
of the Board of such companies to fulfill their responsibility to oversee the quality of the services provided to various entities,
including the investment adviser, to such companies. Such companies may also pay cash for such information.
Securities considered as investments for
each Fund, may also be appropriate for other investment accounts managed by the investment adviser or certain of its affiliates.
Whenever decisions are made to buy or sell securities by each Fund and one or more of such other accounts simultaneously, the investment
adviser will allocate the security transactions (including “new” issues) in a manner which it believes to be equitable
under the circumstances. As a result of such allocations, there may be instances where each Fund will not participate in a transaction
that is allocated among other accounts. If an aggregated order cannot be filled completely, allocations will generally be made
on a pro rata basis. An order may not be allocated on a pro rata basis where, for example: (i) consideration is given to portfolio
managers who have been instrumental in developing or negotiating a particular investment; (ii) consideration is given to an account
with specialized investment policies that coincide with the particulars of a specific investment; (iii) pro rata allocation would
result in odd-lot or de minimis amounts being allocated to a portfolio or other client; or (iv) where the investment adviser reasonably
determines that departure from a pro rata allocation is advisable. While these aggregation and allocation policies could have a
detrimental effect on the price or amount of the securities available to each Fund from time to time, it is the opinion
of the members of the Board that the benefits from the investment adviser organization outweigh any disadvantage that may arise
from exposure to simultaneous transactions.
10. The following is added as
a new section immediately prior to “Financial Statements”:
POTENTIAL CONFLICTS OF INTEREST
As a diversified global financial services firm, Morgan Stanley engages
in a broad spectrum of activities, including financial advisory services, investment management activities, lending, commercial
banking, sponsoring and managing private investment funds, engaging in broker-dealer transactions and principal securities, commodities
and foreign exchange transactions, research publication and other activities. In the ordinary course of its business, Morgan Stanley
is a full-service investment banking and financial services firm and therefore engages in activities where Morgan Stanley’s
interests or the interests of its clients may conflict with the interests of a Fund or Portfolio, if applicable, (collectively
for the purposes of this section, “Fund” or “Funds”). Morgan Stanley advises clients and sponsors, manages
or advises other investment funds and investment programs, accounts and businesses (collectively, together with the Funds, any
new or successor funds, programs, accounts or businesses, the ‘‘Affiliated Investment Accounts’’) with
a wide variety of investment objectives that in some instances may overlap or conflict with a Fund’s investment objectives
and present conflicts of interest. In addition, Morgan Stanley may also from time to time create new or successor Affiliated Investment
Accounts that may compete with a Fund and present similar conflicts of interest. The discussion below enumerates certain actual,
apparent and potential conflicts of interest. There is no assurance that conflicts of interest will be resolved in favor of Fund
shareholders and, in fact, they may not be. Conflicts of interest not described below may also exist.
Material Non-public
and Other Information. It is expected that confidential or material non-public information regarding an investment or potential
investment opportunity may become available to the investment adviser. If such information becomes available, the investment adviser
may be precluded (including by applicable law or internal policies or procedures) from pursuing an investment or disposition opportunity
with respect to such investment or investment opportunity.
The investment adviser may also from time to time be subject to contractual
‘‘stand-still’’ obligations and/or confidentiality obligations that may restrict its ability to trade in
certain investments on a Fund’s behalf. In addition, the investment adviser may be precluded from disclosing such information
to an investment team, even in circumstances in which the information would be beneficial if disclosed. Therefore, the investment
team may not be provided access to material non-public information in the possession of Morgan Stanley that might be relevant to
an investment decision to be made on behalf of a Fund, and the investment team may initiate a transaction or sell an investment
that, if such information had been known to it, may not have been undertaken. In addition, certain members of the investment team
may be recused from certain investment-related discussions so that such members do not receive information that would limit their
ability to perform functions of their employment with the investment adviser or its affiliates unrelated to that of a Fund. Furthermore,
access to certain parts of Morgan Stanley may be subject to third party confidentiality obligations and to information barriers
established by Morgan Stanley in order to manage potential conflicts of interest and regulatory restrictions, including without
limitation joint transaction restrictions pursuant to the 1940 Act. Accordingly, the investment adviser’s ability to source
investments from other business units within Morgan Stanley may be limited and there can be no assurance that the investment adviser
will be able to source any investments from any one or more parts of the Morgan Stanley network.
The investment adviser may restrict its investment decisions and activities
on behalf of the Funds in various circumstances, including because of applicable regulatory requirements or information held by
the investment adviser or Morgan Stanley. The investment adviser might not engage in transactions or other activities for, or enforce
certain rights in favor of, a Fund due to Morgan Stanley’s activities outside the Funds. In instances where trading of an
investment is restricted, the investment adviser may not be able to purchase or sell such investment on behalf of a Fund, resulting
in the Fund’s inability to participate in certain desirable transactions. This inability to buy or sell an investment could
have an adverse effect on a Fund’s portfolio due to, among other things, changes in an investment’s value during the
period its trading is restricted. Also, in situations where the investment adviser is required to aggregate its positions with
those of other Morgan Stanley business units for position limit calculations, the investment adviser may have to refrain from making
investments due to the positions held by other Morgan Stanley business units or their clients. There may be other situations where
the investment adviser refrains from making an investment due to additional disclosure obligations, regulatory requirements, policies,
and reputational risk, or the investment adviser may limit purchases or sales of securities in respect of which Morgan Stanley
is engaged in an underwriting or other distribution capacity.
Morgan Stanley has established certain information barriers and other
policies to address the sharing of information between different businesses within Morgan Stanley. As a result of information barriers,
the investment adviser generally will not have access, or will have limited access, to certain information and personnel in other
areas of Morgan Stanley relating to business transactions for clients (including transactions in investing, banking, prime brokerage
and certain other areas), and generally will not manage the Funds with the benefit of the information held by such other areas.
Morgan Stanley, due to its access to and knowledge of funds, markets and securities based on its prime brokerage and other businesses,
may make decisions based on information or take (or refrain from taking) actions with respect to interests in investments of the
kind held (directly or indirectly) by the Funds in a manner that may be adverse to the Funds, and will not have any obligation
or other duty to share information with the investment adviser.
In limited circumstances, however, including for purposes of managing
business and reputational risk, and subject to policies and procedures, Morgan Stanley personnel, including personnel of the investment
adviser, on one side of an information barrier may have access to information and personnel on the other side of the information
barrier through “wall crossings.” The investment adviser faces conflicts of interest in determining whether to engage
in such wall crossings. Information obtained in connection with such wall crossings may limit or restrict the ability of the investment
adviser to engage in or otherwise effect transactions on behalf of the Funds (including purchasing or selling securities that the
investment adviser may otherwise have purchased or sold for a Fund in
the absence of a wall crossing). In managing conflicts of interest that arise because of the foregoing, the investment adviser
generally will be subject to fiduciary requirements. The investment adviser may also implement internal information barriers or
ethical walls, and the conflicts described herein with respect to information barriers and otherwise with respect to Morgan Stanley
and the investment adviser will also apply internally within the investment adviser. As a result, a Fund may not be permitted to
transact in (e.g., dispose of a security in whole or in part) during periods when it otherwise would have been able to do so, which
could adversely affect a Fund. Other investors in the security that are not subject to such restrictions may be able to transact
in the security during such periods. There may also be circumstances in which, as a result of information held by certain portfolio
management teams in the investment adviser, the investment adviser limits an activity or transaction for a Fund, including if the
Fund is managed by a portfolio management team other than the team holding such information.
Investments by Morgan
Stanley and its Affiliated Investment Accounts. In serving in multiple capacities to Affiliated Investment Accounts, Morgan
Stanley, including the investment adviser and its investment teams, may have obligations to other clients or investors in Affiliated
Investment Accounts, the fulfillment of which may not be in the best interests of a Fund or its shareholders. A Fund’s investment
objectives may overlap with the investment objectives of certain Affiliated Investment Accounts. As a result, the members of an
investment team may face conflicts in the allocation of suitable investment opportunities among a Fund and other investment funds,
programs, accounts and businesses advised by or affiliated with the investment adviser. Certain Affiliated Investment Accounts
may provide for higher management or incentive fees or greater expense reimbursements or overhead allocations, all of which may
contribute to this conflict of interest and create an incentive for the investment adviser to favor such other accounts.
Morgan Stanley currently invests and plans to continue to invest on its
own behalf and on behalf of its Affiliated Investment Accounts in a wide variety of investment opportunities globally. Morgan Stanley
and its Affiliated Investment Accounts, to the extent consistent with applicable law and policies and procedures, will be permitted
to invest in investment opportunities without making such opportunities available to a Fund beforehand. Subject to the foregoing,
Morgan Stanley may offer investments that fall into the investment objectives of an Affiliated Investment Account to such account
or make such investment on its own behalf, even though such investment also falls within a Fund’s investment objectives.
A Fund may invest in opportunities that Morgan Stanley and/or one or more Affiliated Investment Accounts has declined, and vice
versa. All of the foregoing may reduce the number of investment opportunities available to a Fund and may create conflicts of interest
in allocating investment opportunities. Investors should note that the conflicts inherent in making such allocation decisions may
not always be resolved to a Fund’s advantage. There can be no assurance that a Fund will have an opportunity to participate
in certain opportunities that fall within their investment objectives.
To seek to reduce potential conflicts of interest and to attempt to allocate
such investment opportunities in a fair and equitable manner, the investment adviser has implemented allocation policies and procedures.
These policies and procedures are intended to give all clients of the investment adviser, including the Funds, fair access to investment
opportunities consistent with the requirements of organizational documents, investment strategies, applicable laws and regulations,
and the fiduciary duties of the investment adviser. Each client of the investment adviser that is subject to the allocation policies
and procedures, including each Fund, is assigned an investment team and portfolio manager(s) by the investment adviser. The investment
team and portfolio managers review investment opportunities and will decide with respect to the allocation of each opportunity
considering various factors and in accordance with the allocation policies and procedures. The allocation policies and procedures
are subject to change. Investors should note that the conflicts inherent in making such allocation decisions may not always be
resolved to the advantage of a Fund.
It is possible that Morgan Stanley or an Affiliated Investment Account,
including another Eaton Vance fund, will invest in or advise a company that is or becomes a competitor of a company of which a
Fund holds an investment. Such investment could create a conflict between the Fund, on the one hand, and Morgan Stanley or the
Affiliated Investment Account, on the other hand. In such a situation, Morgan Stanley may also have a conflict in the allocation
of its own resources to the portfolio investment. Furthermore, certain Affiliated Investment Accounts will be focused primarily
on investing in other funds which may have strategies that overlap and/or directly conflict and compete with a Fund.
In addition, certain investment professionals who are involved in a Fund’s
activities remain responsible for the investment activities of other Affiliated Investment Accounts managed by the investment adviser
and its affiliates, and they will devote time to the management of such investments and other newly created Affiliated Investment
Accounts (whether in the form of funds, separate accounts or other vehicles), as well as their own investments. In addition, in
connection with the management of investments for other Affiliated Investment Accounts, members of Morgan Stanley and its affiliates
may serve on the boards of directors of or advise companies which may compete with a Fund’s portfolio investments. Moreover,
these Affiliated Investment Accounts managed by Morgan Stanley and its affiliates may pursue investment opportunities that may
also be suitable for a Fund.
It should be noted that Morgan Stanley may, directly or indirectly, make
large investments in certain of its Affiliated Investment Accounts, and accordingly Morgan Stanley’s investment in a Fund
may not be a determining factor in the outcome of any of the foregoing conflicts. Nothing herein restricts or in any way limits
the activities of Morgan Stanley, including its ability to buy or sell interests in, or provide financing to, equity and/or debt
instruments, funds or portfolio companies, for its own accounts or for the accounts of Affiliated Investment Accounts or other
investment funds or clients in accordance with applicable law.
Different clients of the investment adviser, including a Fund, may invest
in different classes of securities of the same issuer, depending on the respective clients’ investment objectives and policies.
As a result, the investment adviser and its affiliates, at times, will seek to satisfy fiduciary obligations to certain clients
owning one class of securities of a particular issuer by pursuing or enforcing rights on behalf of those clients with respect to
such class of securities, and those activities may have an adverse effect on another client which owns a different class of securities
of such issuer. For example, if one client holds debt securities of an issuer and another client holds equity securities of the
same issuer, if the issuer experiences financial or operational challenges, the investment adviser and its affiliates may seek
a liquidation of the issuer on behalf of the client that holds the debt securities, whereas the client holding the equity securities
may benefit from a reorganization of the issuer. Thus, in such situations, the actions taken by the investment adviser or its affiliates
on behalf of one client can negatively impact securities held by another client. These conflicts also exist as between the investment
adviser’s clients, including the Funds, and the Affiliated Investment Accounts managed by Morgan Stanley.
The investment adviser and its affiliates may give advice and recommend
securities to other clients which may differ from advice given to, or securities recommended or bought for, a Fund even though
such other clients’ investment objectives may be similar to those of the Fund.
The investment adviser and its affiliates manage long and short portfolios.
The simultaneous management of long and short portfolios creates conflicts of interest in portfolio management and trading in that
opposite directional positions may be taken in client accounts managed by the same investment team, and creates risks such as:
(i) the risk that short sale activity could adversely affect the market value of long positions in one or more portfolios (and
vice versa) and (ii) the risks associated with the trading desk receiving opposing orders in the same security simultaneously.
The investment adviser and its affiliates have adopted policies and procedures that are reasonably designed to mitigate these conflicts.
In certain circumstances, the investment adviser invest on behalf of itself in securities and other instruments that would be appropriate
for, held by, or may fall within the investment guidelines of its clients, including a Fund. At times, the investment adviser will
give advice or take action for its own accounts that differs from, conflicts with, or is adverse to advice given or action taken
for any client.
From time to time, conflicts also arise due to the fact that certain securities
or instruments maybe held in some client accounts, including a Fund, but not in others, or the client accounts may have different
levels of holdings in certain securities or instruments, and because the accounts pay different levels of fees to the investment
adviser. In addition, at times an investment adviser investment team will give advice or take action with respect to the investments
of one or more clients that is not given or taken with respect to other clients with similar investment programs, objectives, and
strategies. Accordingly, clients with similar strategies will not always hold the same securities or instruments or achieve the
same performance. The investment adviser’s investment teams also advise clients with conflicting programs, objectives or
strategies. These conflicts also exist as between the investment adviser’s clients, including the Funds, and the Affiliated
Investment Accounts managed by Morgan Stanley.
The investment adviser maintains separate trading desks by investment
team and generally based on asset class, including two trading desks trading equity securities. These trading desks operate independently
of one another. The two equity trading desks do not share information. The separate equity trading desks may result in one desk
competing against the other desk when implementing buy and sell transactions, possibly causing certain accounts to pay more or
receive less for a security than other accounts. In addition, Morgan Stanley and its affiliates maintain separate trading desks
that operate independently of each other and do not share information with the investment adviser. The Morgan Stanley and affiliate
trading desks may compete against the investment adviser trading desks when implementing buy and sell transactions, possibly causing
certain Affiliated Investment Accounts to pay more or receive less for a security than other Affiliated Investment Accounts.
Payments to Broker-Dealers
and Other Financial Intermediaries. The investment adviser and/or EVD may pay compensation, out of their own funds and not
as an expense of the Funds, to certain financial intermediaries (which may include affiliates of the investment adviser and EVD),
including recordkeepers and administrators of various deferred compensation plans, in connection with the sale, distribution, marketing
and retention of shares of the Funds and/or shareholder servicing. For example, the investment adviser or EVD may pay additional
compensation to a financial intermediary for, among other things, promoting the sale and distribution of Fund shares, providing
access to various programs, mutual fund platforms or preferred or recommended mutual fund lists that may be offered by a financial
intermediary, granting EVD access to a financial intermediary’s financial advisors and consultants, providing assistance
in the ongoing education and training of a financial intermediary’s financial personnel, furnishing marketing support, maintaining
share balances and/or for sub-accounting, recordkeeping, administrative, shareholder or transaction processing services. Such payments
are in addition to any distribution fees, shareholder servicing fees and/or transfer agency fees that may be payable by the Funds.
The additional payments may be based on various factors, including level of sales (based on gross or net sales or some specified
minimum sales or some other similar criteria related to sales of the Funds and/or some or all other Eaton Vance funds), amount
of assets invested by the financial intermediary’s customers (which could include current or aged assets of the Funds and/or
some or all other Eaton Vance funds), a Fund’s advisory fee, some other agreed upon amount or other measures as determined
from time to time by the investment adviser and/or EVD. The amount of these payments may be different for different financial intermediaries.
The prospect of receiving, or the receipt of, additional
compensation, as described above, by financial intermediaries may provide such financial intermediaries and their financial
advisors and other salespersons with an incentive to favor sales of shares of the Funds over other investment options with
respect to which these financial intermediaries do not receive additional compensation (or receives lower levels of
additional compensation). These payment arrangements, however, will not change the price that an investor pays for shares of
the Funds or the amount that the Funds receive to invest on behalf of an investor. Investors may wish to take such payment
arrangements into account when considering and evaluating any recommendations relating to Fund shares and should review
carefully any disclosures provided by financial intermediaries as to their compensation.
Morgan Stanley Trading
and Principal Investing Activities. Notwithstanding anything to the contrary herein, Morgan Stanley will generally conduct
its sales and trading businesses, publish research and analysis, and render investment advice without regard for a Fund’s
holdings, although these activities could have an adverse impact on the value of one or more of the Fund’s investments, or
could cause Morgan Stanley to have an interest in one or more portfolio investments that is different from, and potentially adverse
to that of a Fund. Furthermore, from time to time, the investment adviser or its affiliates may invest “seed” capital
in a Fund, typically to enable the Fund to commence investment operations and/or achieve sufficient scale. The investment adviser
and its affiliates may hedge such seed capital exposure by investing in derivatives or other instruments expected to produce offsetting
exposure. Such hedging transactions, if any, would occur outside of a Fund.
Morgan Stanley’s sales and trading, financing and principal investing
businesses (whether or not specifically identified as such, and including Morgan Stanley’s trading and principal investing
businesses) will not be required to offer any investment opportunities to a Fund. These businesses may encompass, among other things,
principal trading activities as well as principal investing.
Morgan Stanley’s sales and trading, financing and principal investing
businesses have acquired or invested in, and in the future may acquire or invest in, minority and/or majority control positions
in equity or debt instruments of diverse public and/or private companies. Such activities may put Morgan Stanley in a position
to exercise contractual, voting or creditor rights, or management or other control with respect to securities or loans of portfolio
investments or other issuers, and in these instances Morgan Stanley may, in its discretion and subject to applicable law, act to
protect its own interests or interests of clients, and not a Fund’s interests.
Subject to the limitations of applicable law, a Fund may purchase from
or sell assets to, or make investments in, companies in which Morgan Stanley has or may acquire an interest, including as an owner,
creditor or counterparty.
Morgan Stanley’s
Investment Banking Activities. Morgan Stanley advises clients on a variety of mergers, acquisitions, restructuring, bankruptcy
and financing transactions. Morgan Stanley may act as an advisor to clients, including other investment funds that may compete
with a Fund and with respect to investments that a Fund may hold. Morgan Stanley may give advice and take action with respect to
any of its clients or proprietary accounts that may differ from the advice given, or may involve an action of a different timing
or nature than the action taken, by a Fund. Morgan Stanley may give advice and provide recommendations to persons competing with
a Fund and/or any of a Fund’s investments that are contrary to the Fund’s best interests and/or the best interests
of any of its investments.
Morgan Stanley could be engaged in financial advising, whether on the
buy-side or sell-side, or in financing or lending assignments that could result in Morgan Stanley’s determining in its discretion
or being required to act exclusively on behalf of one or more third parties, which could limit a Fund’s ability to transact
with respect to one or more existing or potential investments. Morgan Stanley may have relationships with third-party funds, companies
or investors who may have invested in or may look to invest in portfolio companies, and there could be conflicts between a Fund’s
best interests, on the one hand, and the interests of a Morgan Stanley client or counterparty, on the other hand.
To the extent that Morgan Stanley advises creditor or debtor companies
in the financial restructuring of companies either prior to or after filing for protection under Chapter 11 of the U. S. Bankruptcy
Code or similar laws in other jurisdictions, the investment adviser’s flexibility in making investments in such restructurings
on a Fund’s behalf may be limited. Morgan Stanley could provide investment banking services to competitors of portfolio companies,
as well as to private equity and/or private credit funds; such activities may present Morgan Stanley with a conflict of interest
vis-a-vis a Fund’s investment and may also result in a conflict in respect of the allocation of investment banking resources
to portfolio companies.
To the extent permitted by applicable law, Morgan Stanley may provide
a broad range of financial services to companies in which a Fund invests, including strategic and financial advisory services,
interim acquisition financing and other lending and underwriting or placement of securities, and Morgan Stanley generally will
be paid fees (that may include warrants or other securities) for such services. Morgan Stanley will not share any of the foregoing
interest, fees and other compensation received by it (including, for the avoidance of doubt, amounts received by the investment
adviser) with a Fund, and any advisory fees payable will not be reduced thereby.
Morgan Stanley may be engaged to act as a financial advisor to a company
in connection with the sale of such company, or subsidiaries or divisions thereof, may represent potential buyers of businesses
through its mergers and acquisition activities and may provide lending and other related financing services in connection with
such transactions. Morgan Stanley’s compensation for such activities is usually based upon realized consideration and is
usually contingent, in substantial part, upon the closing of the transaction. Under these circumstances, a Fund may be precluded
from participating in a transaction with or relating to the company being sold or participating in any financing activity related
to merger or acquisition.
To meet applicable regulatory requirements, there are periods when the
investment adviser will not engage in certain types of transactions in the securities of companies for which a broker-dealer affiliated
with Morgan Stanley is performing investment banking services. Fund shareholders will not receive notice of such instances. In
particular, when a broker-dealer affiliated with Morgan Stanley is engaged in an underwriting or other distribution of securities
of a company, the investment adviser may be prohibited from purchasing such securities on behalf of a Fund. In addition, under
certain circumstances, the investment adviser generally will not initiate transactions in the securities of companies with respect
to which affiliates of the investment adviser may have controlling interests or are affiliated.
The investment adviser believes that the nature and range of clients to
whom Morgan Stanley and its subsidiaries render investment banking and other services is such that it would be inadvisable to exclude
these companies from the Fund’s portfolio.
Morgan Stanley’s
Marketing Activities. Morgan Stanley is engaged in the business of underwriting, syndicating, brokering, administering,
servicing, arranging and advising on the distribution of a wide variety of securities and other investments in which a Fund may
invest. Subject to the restrictions of the 1940 Act, including Sections 10(f) and 17(e) thereof, a Fund may invest in transactions
in which Morgan Stanley acts as underwriter, placement agent, syndicator, broker, administrative agent, servicer, advisor, arranger
or structuring agent and receives fees or other compensation from the sponsors of such products or securities. Any fees earned
by Morgan Stanley in such capacity will not be shared with the investment adviser or the Funds. Certain conflicts of interest,
in addition to the receipt of fees or other compensation, would be inherent in these transactions. Moreover, the interests of one
of Morgan Stanley’s clients with respect to an issuer of securities in which a Fund has an investment may be adverse to the
investment adviser’s or a Fund’s best interests. In conducting the foregoing activities, Morgan Stanley will be acting
for its other clients and will have no obligation to act in the investment adviser’s or a Fund’s best interests.
Client Relationships.
Morgan Stanley has existing and potential relationships with a significant number of corporations, institutions and individuals.
In providing services to its clients, Morgan Stanley may face conflicts of interest with respect to activities recommended to or
performed for such clients, on the one hand, and a Fund, its shareholders or the entities in which the Fund invests, on the other
hand. In addition, these client relationships may present conflicts of interest in determining whether to offer certain investment
opportunities to a Fund.
In acting as principal or in providing advisory and other services to
its other clients, Morgan Stanley may engage in or recommend activities with respect to a particular matter that conflict with
or are different from activities engaged in or recommended by the investment adviser on a Fund’s behalf.
Principal Investments.
To the extent permitted by applicable law, there may be situations in which a Fund’s interests may conflict with the
interests of one or more general accounts of Morgan Stanley and its affiliates or accounts managed by Morgan Stanley or its affiliates.
This may occur because these accounts hold public and private debt and equity securities of many issuers which may be or become
portfolio companies, or from whom portfolio companies may be acquired.
Transactions with
Portfolio Companies of Affiliated Investment Accounts. The companies in which a Fund may invest may be counterparties to
or participants in agreements, transactions or other arrangements with portfolio companies or other entities of portfolio investments
of Affiliated Investment Accounts (for example, a company in which a Fund invests may retain a company in which an Affiliated Investment
Account invests to provide services or may acquire an asset from such company or vice versa). Certain of these agreements, transactions
and arrangements involve fees, servicing payments, rebates and/or other benefits to Morgan Stanley or its affiliates. For example,
portfolio entities may, including at the encouragement of Morgan Stanley, enter into agreements regarding group procurement and/or
vendor discounts. Morgan Stanley and its affiliates may also participate in these agreements and may realize better pricing or
discounts as a result of the participation of portfolio entities. To the extent permitted by applicable law, certain of these agreements
may provide for commissions or similar payments and/or discounts or rebates to be paid to a portfolio entity of an Affiliated Investment
Account, and such payments or discounts or rebates may also be made directly to Morgan Stanley or its affiliates. Under these arrangements,
a particular portfolio company or other entity may benefit to a greater degree than the other participants, and the funds, investment
vehicles and accounts (which may or may not include a Fund) that own an interest in such entity will receive a greater relative
benefit from the arrangements than the Eaton Vance funds, investment vehicles or accounts that do not own an interest therein.
Fees and compensation received by portfolio companies of Affiliated Investment Accounts in relation to the foregoing will not be
shared with a Fund or offset advisory fees payable.
Investments in Portfolio
Investments of Other Funds. To the extent permitted by applicable law, when a Fund invests in certain companies or other
entities, other funds affiliated with the investment adviser may have made or may be making an investment in such companies or
other entities. Other funds that have been or may be managed by the investment adviser may invest in the companies or other entities
in which a Fund has made an investment. Under such circumstances, a Fund and such other funds may have conflicts of interest (e.g.,
over the terms, exit strategies and related matters, including the exercise of remedies of their respective investments). If the
interests held by a Fund are different from (or take priority over) those held by such other funds, the investment adviser may
be required to make a selection at the time of conflicts between the interests held by such other funds and the interests held
by a Fund.
Allocation of Expenses.
Expenses may be incurred that are attributable to a Fund and one or more other Affiliated Investment Accounts (including in connection
with issuers in which a Fund and such other Affiliated Investment Accounts have overlapping investments). The allocation of such
expenses among such entities raises potential conflicts of interest. The investment adviser and its affiliates intend to allocate
such common expenses among a Fund and any such other Affiliated Investment Accounts on a pro rata basis or in such other manner
as the investment adviser deems to be fair and equitable or in such other manner as may be required by applicable law.
Temporary Investments.
To more efficiently invest short-term cash balances held by a Fund, the investment adviser may invest such balances on an
overnight “sweep” basis in shares of one or more money market funds or other short-term vehicles. It is anticipated
that the investment adviser to these money market funds or other short-term vehicles may be the investment adviser (or an affiliate)
to the extent permitted by applicable law, including Rule 12d1-1 under the 1940 Act. The Funds currently invests in Eaton Vance
Cash Reserves Fund, LLC (Cash Reserves Fund), an affiliated investment company managed by Eaton Vance , for this purpose. Eaton
Vance does not currently receive a fee for advisory services provided to Cash Reserves Fund.
Transactions with
Affiliates. The investment adviser and any investment sub-adviser might purchase securities from underwriters or placement
agents in which a Morgan Stanley affiliate is a member of a syndicate or selling group, as a result of which an affiliate might
benefit from the purchase through receipt of a fee or otherwise. Neither the investment adviser nor any investment sub-adviser
will purchase securities on behalf of a Fund from an affiliate that is acting as a manager of a syndicate or selling group. Purchases
by the investment adviser on behalf of a Fund from an affiliate acting as a placement agent must meet the requirements of applicable
law. Furthermore, Morgan Stanley may face conflicts of interest when the Funds use service providers affiliated with Morgan Stanley
because Morgan Stanley receives greater overall fees when they are used.
General Process for
Potential Conflicts. All of the transactions described above involve the potential for conflicts of interest between the
investment adviser, related persons of the investment adviser and/or their clients. The Advisers Act, the 1940 Act and ERISA impose
certain requirements designed to decrease the possibility of conflicts of interest between an investment adviser and its clients.
In some cases, transactions may be permitted subject to fulfillment of certain conditions. Certain other transactions may be prohibited.
In addition, the investment adviser has instituted policies and procedures designed to prevent conflicts of interest from arising
and, when they do arise, to ensure that it effects transactions for clients in a manner that is consistent with its fiduciary duty
to its clients and in accordance with applicable law. The investment adviser seeks to ensure that potential or actual conflicts
of interest are appropriately resolved taking into consideration the overriding best interests of the client.
EATON VANCE FLOATING-RATE ADVANTAGE FUND
EATON VANCE FLOATING-RATE FUND
EATON VANCE FLOATING-RATE & HIGH INCOME FUND
Supplement to Prospectus
dated March 1, 2021
1. The following replaces “Management”
under “Fund Summaries – Eaton Vance Floating-Rate Advantage Fund”:
Management
Investment
Adviser. Boston Management and Research (“BMR”) serves as investment adviser to the Portfolio. Effective March
1, 2021, Eaton Vance Management (“Eaton Vance”) serves as investment adviser to the Fund.
Portfolio Managers
Craig
P. Russ, Vice President of Eaton Vance and BMR, has managed the Portfolio since November 2007 and the Fund since March 1,
2021.
Andrew
N. Sveen, Vice President of Eaton Vance and BMR, has managed the Portfolio since March 2019 and the Fund since March 1,
2021.
2. The following replaces “Management”
under “Fund Summaries – Eaton Vance Floating-Rate Fund”:
Management
Investment
Adviser. Boston Management and Research (“BMR”) serves as investment adviser to the Portfolio. Effective March
1, 2021, Eaton Vance Management (“Eaton Vance”) serves as investment adviser to the Fund.
Portfolio Managers
Craig
P. Russ, Vice President of Eaton Vance and BMR, has managed the Portfolio since November 2007 and the Fund since March 1,
2021.
Andrew
N. Sveen, Vice President of Eaton Vance and BMR, has managed the Portfolio since March 2019 and the Fund since March 1,
2021.
3. The following replaces the
corresponding disclosure under “Management.” in “Management and Organization”:
Each Fund’s investment adviser is Eaton Vance Management (“Eaton
Vance”) and each Portfolio’s investment adviser is Boston Management and Research (“BMR”). Each of Eaton
Vance and BMR have offices at Two International Place, Boston, MA 02110. Eaton Vance and BMR and their predecessor organizations
have been managing assets since 1924 and managing mutual funds since 1931. Prior to March 1, 2021, Eaton Vance was a wholly owned
subsidiary and BMR was an indirect wholly owned subsidiary of Eaton Vance Corp. (“EVC”).
On March 1, 2021, Morgan Stanley acquired EVC (the “Transaction”)
and Eaton Vance and BMR became indirect, wholly-owned subsidiaries of Morgan Stanley. In connection with the Transaction,
Floating-Rate & High Income Fund and each Portfolio entered into a new investment advisory agreement with its adviser. Such
agreement was approved by Fund shareholders or Portfolio interestholders, as applicable, prior to the consummation of the Transaction
and was effective upon its closing.
In addition, Floating-Rate Advantage Fund and Floating-Rate Fund shareholders
have approved a new investment advisory agreement with Eaton Vance that took effect upon the closing of the Transaction. The new
agreements for the Funds are substantially similar to the new investment advisory agreements that were approved with respect to
each Portfolio in connection with the Transaction. Under each Fund’s new investment advisory agreement, Eaton Vance does
not charge an advisory fee with respect to Fund assets invested in the Portfolio or any other investment company for which Eaton
Vance or its affiliates serve as investment adviser and receive an advisory fee. Each Fund currently invests all of its assets
in the Portfolio. In the event Eaton Vance manages directly any assets of the Fund in the future, the applicable advisory fee rate
payable by the Fund will be the same as that payable by the Portfolio.
Morgan Stanley (NYSE: MS), whose principal offices are at
1585 Broadway, New York, New York 10036, is a preeminent global financial services firm engaged in securities trading and
brokerage activities, as well as providing investment banking, research and analysis, financing and financial advisory services.
As of December 31, 2020, after giving effect to the Transaction as described above, Morgan Stanley’s asset management operations
had aggregate assets under management of approximately $1.4 trillion
Each Fund is allocated its pro rata share of the advisory fee paid by
the Portfolio or Portfolios in which it invests, as applicable. Effective March 1, 2021, any fee reduction agreement previously
applicable to a Fund or Portfolio was incorporated into its new investment advisory agreement with its investment adviser.
4. The following replaces “Senior
Debt Portfolio.” under “Management.” in “Management and Organization”:
Eaton
Vance Floating-Rate Advantage Fund. Under its investment advisory agreement with the Fund, Eaton Vance is entitled to receive
an advisory fee on average daily gross assets per annum that are not invested in other investment companies for which Eaton Vance
or its affiliates (i) serves as adviser and (ii) receives an advisory fee. The fee is payable monthly.
Average Daily Gross Assets for the Month
|
Annual Fee Rate
|
Up to and including $1 billion
|
0.5000%
|
In excess of $1 billion up to and including $2 billion
|
0.4500%
|
In excess of $2 billion up to and including $7 billion
|
0.4000%
|
In excess of $7 billion up to and including $10 billion
|
0.3875%
|
In excess of $10 billion up to and including $15 billion
|
0.3750%
|
In excess of $15 billion
|
0.3625%
|
Senior
Debt Portfolio. Under its investment advisory agreement with Senior Debt Portfolio, BMR receives a monthly advisory fee
based on average daily gross assets of the Portfolio. Gross assets of the Portfolio are calculated by deducting all liabilities
of the Portfolio except the principal amount of any indebtedness for money borrowed. The fee is applied on the basis of the following
categories:
Average Daily Gross Assets for the Month
|
Annual Fee Rate*
|
Up to and including $1 billion
|
0.5000%
|
In excess of $1 billion up to and including $2 billion
|
0.4500%
|
In excess of $2 billion up to and including $7 billion
|
0.4000%
|
In excess of $7 billion up to and including $10 billion
|
0.3875%
|
In excess of $10 billion up to and including $15 billion
|
0.3750%
|
In excess of $15 billion
|
0.3625%
|
|
*
|
Prior to March 1, 2021, the Portfolio’s advisory fee was reduced pursuant to a fee reduction agreement effective May
1, 2018. Following the closing of the Transaction, as described above, this fee reduction agreement was incorporated into the Portfolio's
new investment advisory agreement with BMR.
|
For the fiscal year ended October 31,
2020, the effective annual rate of the advisory fee paid to BMR, based on average daily net assets of the Portfolio was
0.52%.
Craig P. Russ and Andrew N. Sveen are Vice Presidents of Eaton Vance and
BMR and are portfolio managers of Senior Debt Portfolio and Eaton Vance Floating-Rate Advantage Fund. Mr. Russ has managed the
Portfolio since November 2007 and Mr. Sveen has managed the Portfolio since March 2019. Each of Messrs. Russ and Sveen have managed
the Fund since March 1, 2021. Messrs. Russ and Sveen manage other Eaton Vance funds and portfolios and have been Eaton Vance portfolio
managers for more than five years.
5. The following replaces “Eaton
Vance Floating Rate Portfolio.” under “Management.” in “Management and Organization”:
Eaton
Vance Floating-Rate Fund. Under its investment advisory agreement with the Fund, Eaton Vance is entitled to receive an advisory
fee on average daily net assets per annum that are not invested in other investment companies for which Eaton Vance or its affiliates
(i) serves as adviser and (ii) receives an advisory fee. The fee is payable monthly.
Average Daily Net Assets for the Month
|
Annual Fee Rate
|
Up to $ 1 billion
|
0.5750%
|
$1 billion but less than $2 billion
|
0.5250%
|
$2 billion but less than $5 billion
|
0.4900%
|
$5 billion but less than $10 billion
|
0.4600%
|
$10 billion but less than $15 billion
|
0.4350%
|
$15 billion but less than $20 billion
|
0.4150%
|
$20 billion but less than $25 billion
|
0.4000%
|
$25 billion and over
|
0.3900%
|
Eaton
Vance Floating Rate Portfolio. Under its investment advisory agreement with Eaton Vance Floating Rate Portfolio, BMR is
entitled to receive an advisory fee as follows:
Average Daily Net Assets for the Month
|
Annual Fee Rate*
|
Up to $ 1 billion
|
0.5750%
|
$1 billion but less than $2 billion
|
0.5250%
|
$2 billion but less than $5 billion
|
0.4900%
|
$5 billion but less than $10 billion
|
0.4600%
|
$10 billion but less than $15 billion
|
0.4350%
|
$15 billion but less than $20 billion
|
0.4150%
|
$20 billion but less than $25 billion
|
0.4000%
|
$25 billion and over
|
0.3900%
|
|
*
|
Prior to March 1, 2021, the Portfolio’s advisory fee was reduced pursuant to a fee reduction agreement effective May
1, 2017. Following the closing of the Transaction, as described above, this fee reduction agreement was incorporated into the Portfolio's
new investment advisory agreement with BMR.
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For the fiscal year ended October 31,
2020, the effective annual rate of the advisory fee paid to BMR, based on average daily net assets of Floating Rate Portfolio
was 0.50%.
Craig P. Russ and Andrew N. Sveen are Vice Presidents of Eaton Vance and
BMR and are portfolio managers of Eaton Vance Floating Rate Portfolio and Eaton Vance Floating-Rate Fund. Mr. Russ has managed
the Portfolio since November 2007 and Mr. Sveen has managed the Portfolio since March 2019. Each of Messrs. Russ and Sveen have
managed the Fund since March 1, 2021. Messrs. Russ and Sveen manage other Eaton Vance funds and portfolios and have been Eaton
Vance portfolio managers for more than five years.
6. The following replaces the
first paragraph under “Payments to Financial Intermediaries.” in “Purchasing Shares”:
Payments to Financial
Intermediaries. In addition to payments disclosed under “Sales Charges” below, the principal underwriter, out
of its own resources, may make cash payments to certain financial intermediaries (which may include affiliates of the principal
underwriter and investment adviser) who provide marketing support, transaction processing and/or administrative services and, in
some cases, include some or all Eaton Vance funds in preferred or specialized selling programs. Payments made by the principal
underwriter to a financial intermediary may be significant and are typically in the form of fees based on Fund sales, assets, transactions
processed and/or accounts attributable to that financial intermediary. Financial intermediaries also may receive amounts from the
principal underwriter in connection with educational or due diligence meetings that include information concerning Eaton Vance
funds. The principal underwriter may pay or allow other promotional incentives or payments to financial intermediaries to the extent
permitted by applicable laws and regulations.
7. The following replaces “Fund
Purchases through Edward D. Jones & Co., L.P. (“Edward Jones”)” under “Appendix A – Financial
Intermediary Sales Charge Variations”:
Policies Regarding Transactions Through Edward
D. Jones & Co., L.P. (“Edward Jones”)
The following information has been provided by Edward Jones:
Effective on or after March 1, 2021, the following information supersedes
prior information with respect to transactions and positions held in fund shares through an Edward Jones system. Clients of Edward
Jones (also referred to as “shareholders”) purchasing fund shares on the Edward Jones commission and fee-based platforms
are eligible only for the following sales charge discounts (also referred to as “breakpoints”) and waivers, which can
differ from discounts and waivers described elsewhere in the mutual fund prospectus or statement of additional information (“SAI”)
or through another broker-dealer. In all instances, it is the shareholder's responsibility to inform Edward Jones at the time of
purchase of any relationship, holdings of fund family or other facts qualifying the purchaser for discounts or waivers. Edward
Jones can ask for documentation from the shareholder of such circumstance. Shareholders should contact Edward Jones if they have
questions regarding their eligibility for these discounts and waivers.
Breakpoints
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·
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Breakpoint pricing, otherwise known as volume pricing, at dollar thresholds as described in the prospectus.
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Rights of Accumulation (“ROA”)
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·
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The applicable sales charge on a purchase of Class A shares is determined by taking into account all share classes (except
certain money market funds and any assets held in group retirement plans) of the mutual fund family held by the shareholder or
in an account grouped by Edward Jones with other accounts for the purpose of providing certain pricing considerations (“pricing
groups”). If grouping assets as a shareholder, this includes all share classes held on the Edward Jones platform and/or held
on another platform. The inclusion of eligible fund family assets in the ROA calculation is dependent on the shareholder notifying
Edward Jones of such assets at the time of calculation. Money market funds are included only if such shares were sold with a sales
charge at the time of purchase or acquired in exchange for shares purchased with a sales charge.
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·
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The employer maintaining a SEP IRA plan and/or SIMPLE IRA plan may elect to establish or change ROA for the IRA accounts associated
with the plan to a plan-level grouping as opposed to including all share classes at a shareholder or pricing group level.
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·
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ROA is determined by calculating the higher of cost minus redemptions or market value (current shares x NAV).
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Letter of Intent (“LOI”)
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·
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Through a LOI, shareholders can receive the sales charge and breakpoint discounts for purchases shareholders intend to make
over a 13-month period from the date Edward Jones receives the LOI. The LOI is determined by calculating the higher of cost or
market value of qualifying holdings at LOI initiation in combination with the value that the shareholder intends to buy over a
13-month period to calculate the front-end sales charge and any breakpoint discounts. Each purchase the shareholder makes during
that 13-month period will receive the sales charge and breakpoint discount that applies to the total amount. If during the 13-month
period the shareholder redeems any of the shares purchased pursuant to a LOI, the value of the redeemed shares will not be included
for purposes of satisfying the LOI. The inclusion of eligible fund family assets in the LOI calculation is dependent on the shareholder
notifying Edward Jones of such assets at the time of calculation. Purchases made before the LOI is received by Edward Jones are
not adjusted under the LOI and will not reduce the sales charge previously paid. Sales charges will be adjusted if LOI is not met.
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·
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If the employer maintaining a SEP IRA plan and/or SIMPLE IRA plan has elected to establish or change ROA for the IRA accounts
associated with the plan to a plan-level grouping, LOIs will also be at the plan-level and may only be established by the employer.
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Front-end Sales Charge Waivers
Sales charges are waived for the following shareholders and
in the following situations:
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·
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Associates of Edward Jones and its affiliates and their family members who are in the same pricing group (as determined by
Edward Jones under its policies and procedures) as the associate. This waiver will continue for the remainder of the associate's
life if the associate retires from Edward Jones in good-standing and remains in good standing pursuant to Edward Jones' policies
and procedures.
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·
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Shares purchased in an Edward Jones fee-based program.
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·
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Shares purchased through reinvestment of capital gains distributions and dividend reinvestment.
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·
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Shares purchased from the proceeds of redeemed shares of the same fund family so long as the following conditions are met:
1) the proceeds are from the sale of shares within 60 days of the purchase, and 2) the sale and purchase are made in the same share
class and the same account or the purchase is made in an individual retirement account with proceeds from liquidations in a non-retirement
account.
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·
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Shares exchanged into Class A shares from another share class so long as the exchange is into the same fund and was initiated
at the discretion of Edward Jones. Edward Jones is responsible for any remaining Contingent Deferred Sales Charge (“CDSC”)
due to the fund company or its affiliate, if applicable. Any future purchases are subject to the applicable sales charge as disclosed
in the prospectus.
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·
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Exchanges from Class C shares to Class A shares of the same fund, generally, in the 84th month following the anniversary of
the purchase date or earlier at the discretion of Edward Jones.
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CDSC Waivers
If the shareholder purchases shares that are subject to a CDSC
and those shares are redeemed before the CDSC is expired, the shareholder is responsible to pay the CDSC except in the following
conditions:
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·
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The death or disability of the shareholder.
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·
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Systematic withdrawals with up to 10% per year of the account value.
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·
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Return of excess contributions from an Individual Retirement Account (IRA).
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·
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Shares sold as part of a required minimum distribution for IRA and retirement accounts if the redemption is taken in or after
the year the shareholder reaches qualified age based on applicable IRS regulations.
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·
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Shares sold to pay Edward Jones fees or costs in such cases where the transaction is initiated by Edward Jones. Edward Jones
is responsible for any remaining CDSC due to the fund company or its affiliate, if applicable.
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·
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Shares exchanged in an Edward Jones fee-based program. Edward Jones is responsible for any remaining CDSC due to the fund company
or its affiliate, if applicable.
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·
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Shares acquired through NAV reinstatement.
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·
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Shares redeemed at the discretion of Edward Jones for Minimum Balances as described below.
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******************************************************************************
Other Important Information Regarding Transactions Through Edward Jones
Minimum Purchase Amounts
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·
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Initial purchase minimum: $250
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·
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Subsequent purchase minimum: none
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Minimum Balances
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·
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Edward Jones has the right to redeem at its discretion fund holdings with a balance of $250 or less. The following are examples
of accounts that are not included in this policy:
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·
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A fee-based account held on an Edward Jones platform
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·
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A 529 account held on an Edward Jones platform
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·
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An account with an active systematic investment plan or LOI
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Exchanging Share Classes
At any time it deems necessary, Edward Jones has the authority to exchange
at NAV a shareholder's holdings in a fund to Class A shares of the same fund. Edward Jones is responsible for any remaining CDSC
due to the fund company or its affiliate, if applicable. Any future purchases are subject to the applicable sales charge as disclosed
in the prospectus.
March 1, 2021
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37958 3.1.21
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EATON VANCE FLOATING-RATE ADVANTAGE FUND
EATON VANCE FLOATING-RATE FUND
EATON VANCE FLOATING-RATE & HIGH INCOME FUND
Supplement to Statement
of Additional Information dated March 1, 2021
1. The following replaces the
first paragraph under “Fund Management.” in “Management and Organization”:
Fund Management.
The Trustees of the Trust are responsible for the overall management and supervision of the affairs
of the Trust. The Trustees of each Portfolio are responsible for the overall management and supervision of each Portfolio. The
Board members and officers of the Trust and each Portfolio are listed below. Except as indicated, each individual has held the
office shown or other offices in the same company for the last five years. Board members hold indefinite terms of office. Each
Trustee holds office until his or her successor is elected and qualified, subject to a prior death, resignation, retirement, disqualification
or removal. Under the terms of each Fund’s and the Portfolios’ current Trustee retirement policy, an Independent
Trustee must retire and resign as a Trustee on the earlier of: (i) the first day of July following his or her 74th birthday; or
(ii), with limited exception, December 31st of the 20th year in which he or she has served as a Trustee. However, if such retirement
and resignation would cause each Fund or Portfolio to be out of compliance with Section 16 of the 1940 Act or any other regulations
or guidance of the SEC, then such retirement and resignation will not become effective until such time as action has been taken
for each Fund or Portfolio to be in compliance therewith. The “noninterested Trustees” consist of those Trustees
who are not “interested persons” of the Trust and each Portfolio, as that term is defined under the 1940 Act. The business
address of each Board member and officer is Two International Place, Boston, Massachusetts 02110. As used in this SAI, “EVC”
refers to Eaton Vance Corp., “EV” refers to Eaton Vance, Inc., “Eaton Vance” refers to Eaton Vance Management
and “EVD” refers to Eaton Vance Distributors, Inc. (see “Principal Underwriter” under “Other Service
Providers”). EV is the trustee of each of Eaton Vance and BMR. Effective March 1, 2021, each of Eaton Vance, BMR, EVD and
EV are indirect wholly-owned subsidiaries of Morgan Stanley. Each officer affiliated with Eaton Vance may hold a position with
other Eaton Vance affiliates that is comparable to his or her position with Eaton Vance listed below.
2. The following replaces the
Thomas E. Faust Jr. row in the Trustees table and in his biographical narrative in “Management and Organization”:
THOMAS E. FAUST JR.
1958
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Trustee
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Since 2007
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Chairman of Morgan Stanley Investment Management, Inc. (MSIM), Director and President of EV, Chief Executive Officer and President of Eaton Vance and BMR, and Director of EVD. Formerly, Chairman, Chief Executive Officer and President of EVC. Trustee and/or officer of 141 registered investment companies. Mr. Faust is an interested person because of his positions with MSIM, BMR, Eaton Vance, EVD and EV, which are affiliates of the Trust and each Portfolio, and his former position with EVC, which was an affiliate of the Trust prior to March 1, 2021.
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141
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Formerly, Director of EVC (2007-2021) and Hexavest Inc. (2012-2021) (investment management firm).
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Thomas E. Faust
Jr. Mr. Faust has served as a member of the Eaton Vance Fund Boards since 2007. Effective March 1, 2021, he is Chairman
of MSIM. He is also Director and President of EV, Chief Executive Officer and President of Eaton Vance and BMR, and Director of
EVD. Mr. Faust previously served as Chairman and Chief Executive Officer of EVC from 2007 through March 1, 2021 and as President
of EVC from 2006 through March 1, 2021. Mr. Faust served as a Director of Hexavest Inc. from 2012-2021. From 2016 through 2019,
Mr. Faust served as a Director of SigFig Wealth Management LLC. Mr. Faust previously served as an equity analyst, portfolio manager,
Director of Equity Research and Management and Chief Investment Officer of Eaton Vance from 1985-2007. He holds B.S. degrees in
Mechanical Engineering and Economics from the Massachusetts Institute of Technology and an MBA from Harvard Business School. Mr.
Faust has been a Chartered Financial Analyst since 1988. He is a trustee and member of the executive committee of the Boston Symphony
Orchestra, Inc. and trustee emeritus of Wellesley College.
3. The following replaces the
first and second paragraphs under “Investment Advisory Services.” in “Investment Advisory and Administrative
Services”:
Investment Advisory
Services. As described in the Prospectus, upon the closing of the transaction by which Morgan Stanley acquired EVC (the
“Transaction”), each Fund entered into a new investment advisory agreement with Eaton Vance and each Portfolio entered
into a new investment advisory agreement with BMR. Each investment adviser manages the investments and affairs of each Portfolio
and each Fund and provides related office facilities and personnel subject to the supervision of the Trust's Board, in the case
of a Fund, or a Portfolio’s Board. Each investment adviser furnishes investment research, advice and supervision, furnish
an investment program and determine what securities will be purchased, held or sold by each Portfolio and each Fund and what portion,
if any, of each Portfolio’s and each Fund’s assets will be held uninvested. Each Investment Advisory Agreement requires
the investment adviser to pay the compensation and expenses of all officers and Trustees who are members of the investment adviser's
organization and all personnel of the investment adviser performing services relating to research and investment activities.
As described in the Prospectus, Eaton Vance serves as investment adviser
for Floating-Rate Advantage Fund and Floating-Rate Fund effective March 1, 2021. For a description of the compensation that each
such Fund pays Eaton Vance, see the Prospectus.
4. The following replaces the
last paragraph under “Investment Advisory Services.” in “Investment Advisory and Administrative Services”:
Each Investment Advisory Agreement with the investment adviser continues
in effect through and including the second anniversary of its execution and shall continue in full force and effect indefinitely
thereafter, but only so long as such continuance after such second anniversary is specifically approved at least annually (i) by
the vote of a majority of the noninterested Trustees of the Trust, in the case of each Fund, or the Portfolio, in the case of each
Portfolio, cast in person at a meeting specifically called for the purpose of voting on such approval and (ii) by the Board of
the Trust, in the case of each Fund, or the Portfolio, in the case of each Portfolio, or by vote of a majority of the outstanding
voting securities of the Portfolio or Fund. Each Agreement may be terminated at any time without penalty on sixty (60) days’
written notice by either party, or by vote of the majority of the outstanding voting securities of the Portfolio or Fund, and each
Agreement will terminate automatically in the event of its assignment. Each Agreement provides that the investment adviser
may render services to others. Each Agreement also provides that the investment adviser shall not be liable for any loss incurred
in connection with the performance of its duties, or action taken or omitted under the Agreement, in the absence of willful misfeasance,
bad faith, gross negligence or reckless disregard of its obligations and duties thereunder, or for any losses sustained in the
acquisition, holding or disposition of any security or other investment. Each Agreement is not intended to, and does not, confer
upon any person not a party to it any right, benefit or remedy of any nature.
5. The following replaces “Information
About BMR and Eaton Vance.” in “Investment Advisory and Administrative Services”:
Information About
BMR and Eaton Vance. BMR and Eaton Vance are business trusts organized under the laws of the Commonwealth of Massachusetts.
EV serves as trustee of BMR and Eaton Vance. As described in the Prospectus, following the closing of the Transaction on March
1, 2021, EV, Eaton Vance and BMR became indirect wholly-owned subsidiaries of Morgan Stanley (NYSE: MS), a preeminent global financial
services firm engaged in securities trading and brokerage activities, as well as providing investment banking, research and analysis,
financing and financial advisory services.
Prior to March 1, 2021, EV and Eaton Vance were wholly-owned subsidiaries
of EVC, a Maryland corporation and publicly-held holding company and BMR was an indirect wholly owned subsidiary of EVC. EVC through
its subsidiaries and affiliates engaged primarily in investment management, administration and marketing activities. The Directors
of EVC were Thomas E. Faust Jr., Ann E. Berman, Leo I. Higdon, Jr., Paula A. Johnson, Brian D. Langstraat, Dorothy E. Puhy, Winthrop
H. Smith, Jr. and Richard A. Spillane, Jr. All shares of the outstanding Voting Common Stock of EVC were deposited in a Voting
Trust, the Voting Trustees of which were Mr. Faust, Paul W. Bouchey, Craig R. Brandon, Daniel C. Cataldo, Michael A. Cirami, Cynthia
J. Clemson, James H. Evans, Maureen A. Gemma, Laurie G. Hylton, Mr. Langstraat, Thomas Lee, Frederick S. Marius, David C. McCabe,
Edward J. Perkin, Lewis R. Piantedosi, Charles B. Reed, Craig P. Russ, Thomas C. Seto, John L. Shea, Eric A. Stein, John H. Streur,
Andrew N. Sveen, Payson F. Swaffield, R. Kelly Williams and Matthew J. Witkos (all of whom are or were officers of Eaton Vance
or its affiliates). The Voting Trustees had unrestricted voting rights for the election of Directors of EVC. Prior to March 1,
2021, all of the outstanding voting trust receipts issued under said Voting Trust were owned by certain of the officers of BMR
and Eaton Vance who may also have been officers, or officers and Directors of EVC and EV. As indicated under “Management
and Organization,” all of the officers of the Trust (as well as Mr. Faust who is also a Trustee) are employees of Eaton Vance
and/or BMR.
6. The following replaces “Compensation
Structure for Eaton Vance and BMR.” and “Method to Determine Compensation.” under “Portfolio Managers.”
in “Investment Advisory and Administrative Services”:
Compensation Structure
for Eaton Vance and BMR. Compensation of the investment adviser's portfolio managers and other investment professionals
has the following primary components: (1) a base salary, (2) an annual cash bonus, and (3) annual non-cash compensation consisting
of restricted shares of Morgan Stanley stock that are subject to a fixed vesting and distribution schedule. The investment adviser’s
investment professionals also receive certain retirement, insurance and other benefits that are broadly available to the investment
adviser’s employees. Compensation of the investment adviser’s investment professionals is reviewed primarily on an
annual basis. Cash bonuses, stock-based compensation awards, and adjustments in base salary are typically paid or put into effect
at or shortly after the December 31st fiscal year end of Morgan Stanley.
Method to Determine
Compensation. The investment adviser compensates its portfolio managers based primarily on the scale and complexity
of their portfolio responsibilities and the total return performance of managed funds and accounts versus the benchmark(s) stated
in the prospectus, as well as an appropriate peer group (as described below). In addition to rankings within peer groups of funds
on the basis of absolute performance, consideration may also be given to relative risk-adjusted performance. Risk-adjusted performance
measures include, but are not limited to, the Sharpe ratio, which uses standard deviation and excess return to determine reward
per unit of risk. Performance is normally based on periods ending on the September 30th preceding fiscal year end. Fund performance
is normally evaluated primarily versus peer groups of funds as determined by Lipper Inc. and/or Morningstar, Inc. When a fund’s
peer group as determined by Lipper or Morningstar is deemed by the investment adviser’s management not to provide a fair
comparison, performance may instead be evaluated primarily against a custom peer group or market index. In evaluating the performance
of a fund and its manager, primary emphasis is normally placed on three-
year performance, with secondary consideration of performance over longer
and shorter periods. For funds that are tax-managed or otherwise have an objective of after-tax returns, performance is measured
net of taxes. For other funds, performance is evaluated on a pre-tax basis. For funds with an investment objective other than total
return (such as current income), consideration will also be given to the fund’s success in achieving its objective. For managers
responsible for multiple funds and accounts, investment performance is evaluated on an aggregate basis, based on averages or weighted
averages among managed funds and accounts. Funds and accounts that have performance-based advisory fees are not accorded disproportionate
weightings in measuring aggregate portfolio manager performance.
The compensation of portfolio managers with other job responsibilities (such
as heading an investment group or providing analytical support to other portfolios) will include consideration of the scope of
such responsibilities and the managers’ performance in meeting them.
The investment adviser seeks to compensate portfolio managers commensurate
with their responsibilities and performance, and competitive with other firms within the investment management industry. The investment
adviser participates in investment-industry compensation surveys and utilizes survey data as a factor in determining salary, bonus
and stock-based compensation levels for portfolio managers and other investment professionals. Salaries, bonuses and stock-based
compensation are also influenced by the operating performance of the investment adviser and Morgan Stanley. The overall annual
cash bonus pool is generally based on a substantially fixed percentage of pre-bonus adjusted operating income. While the salaries
of the investment adviser’s portfolio managers are comparatively fixed, cash bonuses and stock-based compensation may fluctuate
significantly from year to year, based on changes in manager performance and other factors as described herein. For a high performing
portfolio manager, cash bonuses and stock-based compensation may represent a substantial portion of total compensation.
7. The following replaces the
first two paragraphs in “Other Service Providers”:
Principal Underwriter.
Eaton Vance Distributors, Inc. (“EVD”), Two International Place, Boston, MA 02110 is
the principal underwriter of each Fund. The principal underwriter acts as principal in selling shares under a Distribution Agreement
with the Trust. The expenses of printing copies of prospectuses used to offer shares and other selling literature and of advertising
are borne by the principal underwriter. The fees and expenses of qualifying and registering and maintaining qualifications and
registrations of a Fund and its shares under federal and state securities laws are borne by the Fund. The Distribution Agreement
is renewable annually by the members of the Board (including a majority of the noninterested Trustees who have no direct or indirect
financial interest in the operation of the Distribution Agreement or any applicable Distribution Plan), may be terminated on sixty
days’ notice either by such Trustees or by vote of a majority of the outstanding Fund shares or on six months’ notice
by the principal underwriter and is automatically terminated upon assignment. The principal underwriter distributes shares on a
“best efforts” basis under which it is required to take and pay for only such shares as may be sold. Effective March
1, 2021, EVD is an indirect wholly-owned subsidiary of Morgan Stanley. Prior to March 1, 2021, EVD was a direct, wholly-owned subsidiary
of EVC. Mr. Faust is also a Director of EVD. EVD also serves as placement agent for the Portfolio, if applicable.
Custodian.
State Street Bank and Trust Company (“State Street”), State Street Financial Center,
One Lincoln Street, Boston, MA 02111, serves as custodian to each Fund and Portfolio, if applicable. State Street has custody of
all cash and securities representing a Fund’s interest in the Portfolio, has custody of the Portfolio’s and each
Fund's assets, maintains the general ledger of the Portfolio and each Fund and computes the daily net asset value of interests
in the Portfolio and the net asset value of shares of each Fund. In such capacity it attends to details in connection with the
sale, exchange, substitution, transfer or other dealings with each Fund's and the Portfolio’s investments, receives and disburses
all funds and performs various other ministerial duties upon receipt of proper instructions from the Trust and the Portfolio. State
Street also provides services in connection with the preparation of shareholder reports and the electronic filing of such reports
with the SEC.
8. The following replaces the
first, second, third, fifth, seventh and eighth paragraphs in “Portfolio Securities Transactions”:
A Fund or Portfolio may transact in Senior Loans with major international
banks, selected domestic regional banks, insurance companies, finance companies and other financial institutions and market participants.
In selecting financial institutions with which a Fund or Portfolio may transact, Eaton Vance or BMR will consider, among other
factors, the financial strength, professional ability, level of service and research capability of the institution. A Fund or Portfolio
may trade in other types of investments (e.g., bonds and equity securities) which generally are traded through broker-dealers.
Decisions concerning the execution of portfolio security transactions,
including the selection of the market and the broker-dealer firm or other financial intermediary (each an “intermediary”),
are made by the investment adviser. Each Fund and Portfolio are responsible for the expenses associated with its portfolio transactions.
The investment adviser is also responsible for the execution of transactions for all other accounts managed by it. The investment
adviser places the portfolio security transactions for execution with one or more intermediaries firms. The investment adviser
uses its best efforts to obtain execution of portfolio security transactions at prices that, in the investment adviser’s
judgment, are advantageous to the client and at a reasonably competitive spread or (when a disclosed commission is being charged)
at reasonably competitive commission rates. In seeking such execution, the investment adviser will use its best judgment in evaluating
the terms of a transaction, and will give consideration to various relevant factors, which may include, without limitation, the
full range and quality of the intermediary’s services, responsiveness of the intermediary to the investment adviser, the
size and type of the transaction, the nature and character of the market for the security, the confidentiality, speed and certainty
of effective execution required for the transaction, the general execution and operational capabilities of the intermediary, the
reputation, reliability, experience and financial condition of the intermediary, the value and quality of the services rendered
by the intermediary in this and other transactions, and the amount of the spread or commission, if any. In addition, the investment
adviser may consider the receipt of Research Services (as defined below), provided it does not compromise the investment adviser’s obligation to seek best overall execution for
a Fund and is otherwise in compliance with applicable law. The investment adviser may engage in portfolio transactions with an
intermediary that sells shares of Eaton Vance funds, provided such transactions are not directed to that intermediary as compensation
for the promotion or sale of such shares.
As described in the Prospectus, following the closing of the Transaction
on March 1, 2021, the investment adviser became an “affiliated person,” as defined in the 1940 Act, of Morgan Stanley
and its affiliates, including certain intermediaries (as previously defined). As a result, the investment adviser is subject to
certain restrictions regarding transactions with Morgan Stanley-affiliated intermediaries, as set forth in the 1940 Act. Under
certain circumstances, such restrictions may limit the investment adviser’s ability to place portfolio transactions on behalf
of a Fund or Portfolio at the desired time or price. Any transaction the investment adviser enters into with a Morgan Stanley-affiliated
intermediary on behalf of a Fund or Portfolio will be done in compliance with applicable laws, rules, and regulations; will be
subject to any restrictions contained in a Fund’s or Portfolio’s investment advisory agreement; will be subject to
the investment adviser’sduty to seek best execution; and, will comply with any applicable policies and procedures of the
investment adviser, as described below.
Subject to the overriding objective of obtaining the best execution of
orders and applicable rules and regulations, as described above, a Fund or Portfolio may use an affiliated intermediary, including
a Morgan Stanley-affiliated intermediary, to effect Fund or Portfolio portfolio transactions, including transactions in futures
contracts and options on futures contracts, under procedures adopted by the Board. In order to use such affiliated intermediaries,
the Fund’s or Portfolio’s Board must approve and periodically review procedures reasonably designed to ensure that
commission rates and other remuneration paid to the affiliated intermediaries are fair and reasonable in comparison to those of
other intermediaries for comparable transactions involving similar securities being purchased or sold during a comparable time
period.
Pursuant to an order issued by the SEC, a Fund or Portfolio is permitted
to engage in principal transactions in money market instruments, subject to certain conditions, with Morgan Stanley & Co. LLC,
a broker-dealer affiliated with Morgan Stanley.
Transactions on stock exchanges and other agency transactions involve the
payment of negotiated brokerage commissions. Such commissions vary among different broker-dealer firms, and a particular broker-dealer
may charge different commissions according to such factors as the difficulty and size of the transaction and the volume of business
done with such broker-dealer. Transactions in foreign securities often involve the payment of brokerage commissions, which may
be higher than those in the United States. There is generally no stated commission in the case of securities traded in the over-the-counter
markets including transactions in fixed-income securities which are generally purchased and sold on a net basis (i.e., without
commission) through intermediaries and banks acting for their own account rather than as brokers. Such intermediaries attempt to
profit from such transactions by buying at the bid price and selling at the higher asked price of the market for such obligations,
and the difference between the bid and asked price is customarily referred to as the spread. Fixed-income transactions may also
be transacted directly with the issuer of the obligations. In an underwritten offering the price paid often includes a disclosed
fixed commission or discount retained by the underwriter or dealer. Although spreads or commissions paid on portfolio security
transactions will, in the judgment of the investment adviser, be reasonable in relation to the value of the services provided,
commissions exceeding those which another firm might charge may be paid to intermediaries who were selected to execute transactions
on behalf of the investment adviser’s clients in part for providing brokerage and research services to the investment adviser
as permitted by applicable law.
Research Services provided by (and produced by) broker-dealers that execute
portfolio transactions or from affiliates of executing broker-dealers are referred to as “Proprietary Research.” Except
for trades executed in jurisdictions where such consideration is not permissible, the investment adviser may and does consider
the receipt of Proprietary Research Services as a factor in selecting broker dealers to execute client portfolio transactions,
provided it does not compromise the investment adviser’s obligation to seek best overall execution. In jurisdictions where
permissible, the investment adviser also may consider the receipt of Research Services under so called “client commission
arrangements” or “commission sharing arrangements” (both referred to as “CCAs”) as a factor in selecting
broker dealers to execute transactions, provided it does not compromise the investment adviser’s obligation to seek best
overall execution. Under a CCA arrangement, the investment adviser may cause client accounts to effect transactions through a broker-dealer
and request that the broker-dealer allocate a portion of the commissions paid on those transactions to a pool of commission credits
that are paid to other firms that provide Research Services to the investment adviser. Under a CCA, the broker-dealer that provides
the Research Services need not execute the trade. Participating in CCAs may enable the investment adviser to consolidate payments
for research using accumulated client commission credits from transactions executed through a particular broker-dealer to periodically
pay for Research Services obtained from and provided by other firms, including other broker-dealers that supply Research Services.
The investment adviser believes that CCAs offer the potential to optimize the execution of trades and the acquisition of a variety
of high quality Research Services that the investment adviser might not be provided access to absent CCAs. The investment adviser
may enter into CCA arrangements with a number of broker-dealers and other firms, including certain affiliates of the investment
adviser. The investment adviser will only enter into and utilize CCAs to the extent permitted by Section 28(e) and other applicable
law.
The investment companies sponsored by the investment adviser or certain
of its affiliates also may allocate brokerage commissions to acquire information relating to the
performance, fees and expenses of such companies and other investment companies, which information is used by the members
of the Board of such companies to fulfill their responsibility to oversee the quality of the services provided to various entities,
including the investment adviser, to such companies. Such companies may also pay cash for such information.
Securities considered as investments for each Fund and Portfolio, if applicable,
may also be appropriate for other investment accounts managed by the investment adviser or certain of its affiliates. Whenever
decisions are made to buy or sell securities by each Fund or Portfolio and one or more of such other accounts simultaneously, the
investment adviser will allocate the security transactions (including “new” issues) in a manner which it believes to
be equitable under the circumstances. As a result of such allocations, there may be instances where each Fund or Portfolio will
not participate in a transaction that is allocated among other accounts. If an aggregated order cannot be filled completely, allocations
will
generally be made on a pro rata basis. An order may not be allocated on a
pro rata basis where, for example: (i) consideration is given to portfolio managers who have been instrumental in developing or
negotiating a particular investment; (ii) consideration is given to an account with specialized investment policies that coincide
with the particulars of a specific investment; (iii) pro rata allocation would result in odd-lot or de minimis amounts being allocated
to a portfolio or other client; or (iv) where the investment adviser reasonably determines that departure from a pro rata allocation
is advisable. While these aggregation and allocation policies could have a detrimental effect on the price or amount of the securities
available to each Fund or Portfolio from time to time, it is the opinion of the members of the Board that the benefits from the
investment adviser organization outweigh any disadvantage that may arise from exposure to simultaneous transactions.
9. The following is added as
a new section before “Financial Statements”:
POTENTIAL CONFLICTS OF INTEREST
As a diversified global financial services firm, Morgan Stanley engages
in a broad spectrum of activities, including financial advisory services, investment management activities, lending, commercial
banking, sponsoring and managing private investment funds, engaging in broker-dealer transactions and principal securities, commodities
and foreign exchange transactions, research publication and other activities. In the ordinary course of its business, Morgan Stanley
is a full-service investment banking and financial services firm and therefore engages in activities where Morgan Stanley’s
interests or the interests of its clients may conflict with the interests of a Fund or Portfolio, if applicable, (collectively
for the purposes of this section, “Fund” or “Funds”). Morgan Stanley advises clients and sponsors, manages
or advises other investment funds and investment programs, accounts and businesses (collectively, together with the Funds, any
new or successor funds, programs, accounts or businesses, the ‘‘Affiliated Investment Accounts’’) with
a wide variety of investment objectives that in some instances may overlap or conflict with a Fund’s investment objectives
and present conflicts of interest. In addition, Morgan Stanley may also from time to time create new or successor Affiliated Investment
Accounts that may compete with a Fund and present similar conflicts of interest. The discussion below enumerates certain actual,
apparent and potential conflicts of interest. There is no assurance that conflicts of interest will be resolved in favor of Fund
shareholders and, in fact, they may not be. Conflicts of interest not described below may also exist.
Material Non-public
and Other Information. It is expected that confidential or material non-public information regarding an investment or potential
investment opportunity may become available to the investment adviser. If such information becomes available, the investment adviser
may be precluded (including by applicable law or internal policies or procedures) from pursuing an investment or disposition opportunity
with respect to such investment or investment opportunity.
The investment adviser may also from time to time be subject to contractual
‘‘stand-still’’ obligations and/or confidentiality obligations that may restrict its ability to trade in
certain investments on a Fund’s behalf. In addition, the investment adviser may be precluded from disclosing such information
to an investment team, even in circumstances in which the information would be beneficial if disclosed. Therefore, the investment
team may not be provided access to material non-public information in the possession of Morgan Stanley that might be relevant to
an investment decision to be made on behalf of a Fund, and the investment team may initiate a transaction or sell an investment
that, if such information had been known to it, may not have been undertaken. In addition, certain members of the investment team
may be recused from certain investment-related discussions so that such members do not receive information that would limit their
ability to perform functions of their employment with the investment adviser or its affiliates unrelated to that of a Fund. Furthermore,
access to certain parts of Morgan Stanley may be subject to third party confidentiality obligations and to information barriers
established by Morgan Stanley in order to manage potential conflicts of interest and regulatory restrictions, including without
limitation joint transaction restrictions pursuant to the 1940 Act. Accordingly, the investment adviser’s ability to source
investments from other business units within Morgan Stanley may be limited and there can be no assurance that the investment adviser
will be able to source any investments from any one or more parts of the Morgan Stanley network.
The investment adviser may restrict its investment decisions and activities
on behalf of the Funds in various circumstances, including because of applicable regulatory requirements or information held by
the investment adviser or Morgan Stanley. The investment adviser might not engage in transactions or other activities for, or enforce
certain rights in favor of, a Fund due to Morgan Stanley’s activities outside the Funds. In instances where trading of an
investment is restricted, the investment adviser may not be able to purchase or sell such investment on behalf of a Fund, resulting
in the Fund’s inability to participate in certain desirable transactions. This inability to buy or sell an investment could
have an adverse effect on a Fund’s portfolio due to, among other things, changes in an investment’s value during the
period its trading is restricted. Also, in situations where the investment adviser is required to aggregate its positions with
those of other Morgan Stanley business units for position limit calculations, the investment adviser may have to refrain from making
investments due to the positions held by other Morgan Stanley business units or their clients. There may be other situations where
the investment adviser refrains from making an investment due to additional disclosure obligations, regulatory requirements, policies,
and reputational risk, or the investment adviser may limit purchases or sales of securities in respect of which Morgan Stanley
is engaged in an underwriting or other distribution capacity.
Morgan Stanley has established certain information barriers and other
policies to address the sharing of information between different businesses within Morgan Stanley. As a result of information barriers,
the investment adviser generally will not have access, or will have limited access, to certain information and personnel in other
areas of Morgan Stanley relating to business transactions for clients (including transactions in investing, banking, prime brokerage
and certain other areas), and generally will not manage the Funds with the benefit of the information held by such other areas.
Morgan Stanley, due to its access to and knowledge of funds, markets and securities based on its prime brokerage and other businesses,
may make decisions based on information or take (or refrain from taking) actions with respect to interests in investments of the
kind held (directly or indirectly) by the Funds in a manner that may be adverse to the Funds, and will not have any obligation
or other duty to share information with the investment adviser.
In limited circumstances, however, including for purposes of managing
business and reputational risk, and subject to policies and procedures, Morgan Stanley personnel, including personnel of the investment
adviser, on one side of an information barrier may have access to information and personnel on the other side of the information
barrier through “wall crossings.” The investment adviser faces conflicts of interest in determining whether to engage
in such wall crossings. Information obtained in connection with such wall crossings may limit or restrict the ability of the investment
adviser to engage in or otherwise effect transactions on behalf of the Funds (including purchasing or selling securities that the
investment adviser may otherwise have purchased or sold for a Fund in the absence of a wall crossing). In managing conflicts of
interest that arise because of the foregoing, the investment adviser generally will be subject to fiduciary requirements. The investment
adviser may also implement internal information barriers or ethical walls, and the conflicts described herein with respect to information
barriers and otherwise with respect to Morgan Stanley and the investment adviser will also apply internally within the investment
adviser. As a result, a Fund may not be permitted to transact in (e.g., dispose of a security in whole or in part) during periods
when it otherwise would have been able to do so, which could adversely affect a Fund. Other investors in the security that are
not subject to such restrictions may be able to transact in the security during such periods. There may also be circumstances in
which, as a result of information held by certain portfolio management teams in the investment adviser, the investment adviser
limits an activity or transaction for a Fund, including if the Fund is managed by a portfolio management team other than the team
holding such information.
Investments by Morgan
Stanley and its Affiliated Investment Accounts. In serving in multiple capacities to Affiliated Investment Accounts, Morgan
Stanley, including the investment adviser and its investment teams, may have obligations to other clients or investors in Affiliated
Investment Accounts, the fulfillment of which may not be in the best interests of a Fund or its shareholders. A Fund’s investment
objectives may overlap with the investment objectives of certain Affiliated Investment Accounts. As a result, the members of an
investment team may face conflicts in the allocation of suitable investment opportunities among a Fund and other investment funds,
programs, accounts and businesses advised by or affiliated with the investment adviser. Certain Affiliated Investment Accounts
may provide for higher management or incentive fees or greater expense reimbursements or overhead allocations, all of which may
contribute to this conflict of interest and create an incentive for the investment adviser to favor such other accounts.
Morgan Stanley currently invests and plans to continue to invest on its
own behalf and on behalf of its Affiliated Investment Accounts in a wide variety of investment opportunities globally. Morgan Stanley
and its Affiliated Investment Accounts, to the extent consistent with applicable law and policies and procedures, will be permitted
to invest in investment opportunities without making such opportunities available to a Fund beforehand. Subject to the foregoing,
Morgan Stanley may offer investments that fall into the investment objectives of an Affiliated Investment Account to such account
or make such investment on its own behalf, even though such investment also falls within a Fund’s investment objectives.
A Fund may invest in opportunities that Morgan Stanley and/or one or more Affiliated Investment Accounts has declined, and vice
versa. All of the foregoing may reduce the number of investment opportunities available to a Fund and may create conflicts of interest
in allocating investment opportunities. Investors should note that the conflicts inherent in making such allocation decisions may
not always be resolved to a Fund’s advantage. There can be no assurance that a Fund will have an opportunity to participate
in certain opportunities that fall within their investment objectives.
To seek to reduce potential conflicts of interest and to attempt to allocate
such investment opportunities in a fair and equitable manner, the investment adviser has implemented allocation policies and procedures.
These policies and procedures are intended to give all clients of the investment adviser, including the Funds, fair access to investment
opportunities consistent with the requirements of organizational documents, investment strategies, applicable laws and regulations,
and the fiduciary duties of the investment adviser. Each client of the investment adviser that is subject to the allocation policies
and procedures, including each Fund, is assigned an investment team and portfolio manager(s) by the investment adviser. The investment
team and portfolio managers review investment opportunities and will decide with respect to the allocation of each opportunity
considering various factors and in accordance with the allocation policies and procedures. The allocation policies and procedures
are subject to change. Investors should note that the conflicts inherent in making such allocation decisions may not always be
resolved to the advantage of a Fund.
It is possible that Morgan Stanley or an Affiliated Investment Account,
including another Eaton Vance fund, will invest in or advise a company that is or becomes a competitor of a company of which a
Fund holds an investment. Such investment could create a conflict between the Fund, on the one hand, and Morgan Stanley or the
Affiliated Investment Account, on the other hand. In such a situation, Morgan Stanley may also have a conflict in the allocation
of its own resources to the portfolio investment. Furthermore, certain Affiliated Investment Accounts will be focused primarily
on investing in other funds which may have strategies that overlap and/or directly conflict and compete with a Fund.
In addition, certain investment professionals who are involved in a Fund’s
activities remain responsible for the investment activities of other Affiliated Investment Accounts managed by the investment adviser
and its affiliates, and they will devote time to the management of such investments and other newly created Affiliated Investment
Accounts (whether in the form of funds, separate accounts or other vehicles), as well as their own investments. In addition, in
connection with the management of investments for other Affiliated Investment Accounts, members of Morgan Stanley and its affiliates
may serve on the boards of directors of or advise companies which may compete with a Fund’s portfolio investments. Moreover,
these Affiliated Investment Accounts managed by Morgan Stanley and its affiliates may pursue investment opportunities that may
also be suitable for a Fund.
It should be noted that Morgan Stanley may, directly or indirectly, make
large investments in certain of its Affiliated Investment Accounts, and accordingly Morgan Stanley’s investment in a Fund
may not be a determining factor in the outcome of any of the foregoing conflicts. Nothing herein restricts or in any way limits
the activities of Morgan Stanley, including its ability to buy or sell interests in, or provide financing to, equity and/or debt
instruments, funds or portfolio companies, for its own accounts or for the accounts of Affiliated Investment Accounts or other
investment funds or clients in accordance with applicable law.
Different clients of the investment adviser, including a Fund, may invest
in different classes of securities of the same issuer, depending on the respective clients’ investment objectives and policies.
As a result, the investment adviser and its affiliates, at times, will seek to satisfy fiduciary obligations to certain clients
owning one class of securities of a particular issuer by pursuing or enforcing rights on behalf of those clients with respect to
such class of securities, and those activities may have an adverse effect on another client which owns a different class of securities
of such issuer. For example, if one client holds debt securities of an issuer and another client holds equity securities of the
same issuer, if the issuer experiences financial or operational challenges, the investment adviser and its affiliates may seek
a liquidation of the issuer on behalf of the client that holds the debt securities, whereas the client holding the equity securities
may benefit from a reorganization of the issuer. Thus, in such situations, the actions taken by the investment adviser or its affiliates
on behalf of one client can negatively impact securities held by another client. These conflicts also exist as between the investment
adviser’s clients, including the Funds, and the Affiliated Investment Accounts managed by Morgan Stanley.
The investment adviser and its affiliates may give advice and recommend
securities to other clients which may differ from advice given to, or securities recommended or bought for, a Fund even though
such other clients’ investment objectives may be similar to those of the Fund.
The investment adviser and its affiliates manage long and short portfolios.
The simultaneous management of long and short portfolios creates conflicts of interest in portfolio management and trading in that
opposite directional positions may be taken in client accounts managed by the same investment team, and creates risks such as:
(i) the risk that short sale activity could adversely affect the market value of long positions in one or more portfolios (and
vice versa) and (ii) the risks associated with the trading desk receiving opposing orders in the same security simultaneously.
The investment adviser and its affiliates have adopted policies and procedures that are reasonably designed to mitigate these conflicts.
In certain circumstances, the investment adviser invest on behalf of itself in securities and other instruments that would be appropriate
for, held by, or may fall within the investment guidelines of its clients, including a Fund. At times, the investment adviser will
give advice or take action for its own accounts that differs from, conflicts with, or is adverse to advice given or action taken
for any client.
From time to time, conflicts also arise due to the fact that certain securities
or instruments maybe held in some client accounts, including a Fund, but not in others, or the client accounts may have different
levels of holdings in certain securities or instruments, and because the accounts pay different levels of fees to the investment
adviser. In addition, at times an investment adviser investment team will give advice or take action with respect to the investments
of one or more clients that is not given or taken with respect to other clients with similar investment programs, objectives, and
strategies. Accordingly, clients with similar strategies will not always hold the same securities or instruments or achieve the
same performance. The investment adviser’s investment teams also advise clients with conflicting programs, objectives or
strategies. These conflicts also exist as between the investment adviser’s clients, including the Funds, and the Affiliated
Investment Accounts managed by Morgan Stanley.
The investment adviser maintains separate trading desks by investment
team and generally based on asset class, including two trading desks trading equity securities. These trading desks operate independently
of one another. The two equity trading desks do not share information. The separate equity trading desks may result in one desk
competing against the other desk when implementing buy and sell transactions, possibly causing certain accounts to pay more or
receive less for a security than other accounts. In addition, Morgan Stanley and its affiliates maintain separate trading desks
that operate independently of each other and do not share information with the investment adviser. The Morgan Stanley and affiliate
trading desks may compete against the investment adviser trading desks when implementing buy and sell transactions, possibly causing
certain Affiliated Investment Accounts to pay more or receive less for a security than other Affiliated Investment Accounts.
Payments to Broker-Dealers
and Other Financial Intermediaries. The investment adviser and/or EVD may pay compensation, out of their own funds and not
as an expense of the Funds, to certain financial intermediaries (which may include affiliates of the investment adviser and EVD),
including recordkeepers and administrators of various deferred compensation plans, in connection with the sale, distribution, marketing
and retention of shares of the Funds and/or shareholder servicing. For example, the investment adviser or EVD may pay additional
compensation to a financial intermediary for, among other things, promoting the sale and distribution of Fund shares, providing
access to various programs, mutual fund platforms or preferred or recommended mutual fund lists that may be offered by a financial
intermediary, granting EVD access to a financial intermediary’s financial advisors and consultants, providing assistance
in the ongoing education and training of a financial intermediary’s financial personnel, furnishing marketing support, maintaining
share balances and/or for sub-accounting, recordkeeping, administrative, shareholder or transaction processing services. Such payments
are in addition to any distribution fees, shareholder servicing fees and/or transfer agency fees that may be payable by the Funds.
The additional payments may be based on various factors, including level of sales (based on gross or net sales or some specified
minimum sales or some other similar criteria related to sales of the Funds and/or some or all other Eaton Vance funds), amount
of assets invested by the financial intermediary’s customers (which could include current or aged assets of the Funds and/or
some or all other Eaton Vance funds), a Fund’s advisory fee, some other agreed upon amount or other measures as determined
from time to time by the investment adviser and/or EVD. The amount of these payments may be different for different financial intermediaries.
The prospect of receiving, or the receipt of, additional compensation,
as described above, by financial intermediaries may provide such financial intermediaries and their financial advisors and other
salespersons with an incentive to favor sales of shares of the Funds over other investment options with respect to which these
financial intermediaries do not receive additional compensation (or receives lower levels of additional compensation). These payment
arrangements, however, will not change the price that an investor pays for shares of the Funds or the amount that the Funds receive
to invest on behalf of an investor. Investors may wish to take such payment arrangements into account when considering and evaluating
any recommendations relating to Fund shares and should review carefully any disclosures provided by financial intermediaries as
to their compensation.
Morgan Stanley Trading
and Principal Investing Activities. Notwithstanding anything to the contrary herein, Morgan Stanley will generally conduct
its sales and trading businesses, publish research and analysis, and render investment advice without regard for a Fund’s
holdings, although these activities could have an adverse impact on the value of one or more of the Fund’s investments, or
could cause Morgan Stanley to have an interest in one or more portfolio investments that is different from, and potentially adverse
to that of a Fund. Furthermore, from time to time, the investment adviser or its affiliates may invest “seed” capital
in a Fund, typically to enable the Fund to commence investment operations and/or achieve sufficient scale. The investment adviser
and its affiliates may hedge such seed capital exposure by investing in derivatives or other instruments expected to produce offsetting
exposure. Such hedging transactions, if any, would occur outside of a Fund.
Morgan Stanley’s sales and trading, financing and principal investing
businesses (whether or not specifically identified as such, and including Morgan Stanley’s trading and principal investing
businesses) will not be required to offer any investment opportunities to a Fund. These businesses may encompass, among other things,
principal trading activities as well as principal investing.
Morgan Stanley’s sales and trading, financing and principal investing
businesses have acquired or invested in, and in the future may acquire or invest in, minority and/or majority control positions
in equity or debt instruments of diverse public and/or private companies. Such activities may put Morgan Stanley in a position
to exercise contractual, voting or creditor rights, or management or other control with respect to securities or loans of portfolio
investments or other issuers, and in these instances Morgan Stanley may, in its discretion and subject to applicable law, act to
protect its own interests or interests of clients, and not a Fund’s interests.
Subject to the limitations of applicable law, a Fund may purchase from
or sell assets to, or make investments in, companies in which Morgan Stanley has or may acquire an interest, including as an owner,
creditor or counterparty.
Morgan Stanley’s
Investment Banking Activities. Morgan Stanley advises clients on a variety of mergers, acquisitions, restructuring, bankruptcy
and financing transactions. Morgan Stanley may act as an advisor to clients, including other investment funds that may compete
with a Fund and with respect to investments that a Fund may hold. Morgan Stanley may give advice and take action with respect to
any of its clients or proprietary accounts that may differ from the advice given, or may involve an action of a different timing
or nature than the action taken, by a Fund. Morgan Stanley may give advice and provide recommendations to persons competing with
a Fund and/or any of a Fund’s investments that are contrary to the Fund’s best interests and/or the best interests
of any of its investments.
Morgan Stanley could be engaged in financial advising, whether on the
buy-side or sell-side, or in financing or lending assignments that could result in Morgan Stanley’s determining in its discretion
or being required to act exclusively on behalf of one or more third parties, which could limit a Fund’s ability to transact
with respect to one or more existing or potential investments. Morgan Stanley may have relationships with third-party funds, companies
or investors who may have invested in or may look to invest in portfolio companies, and there could be conflicts between a Fund’s
best interests, on the one hand, and the interests of a Morgan Stanley client or counterparty, on the other hand.
To the extent that Morgan Stanley advises creditor or debtor companies
in the financial restructuring of companies either prior to or after filing for protection under Chapter 11 of the U.S. Bankruptcy
Code or similar laws in other jurisdictions, the investment adviser’s flexibility in making investments in such restructurings
on a Fund’s behalf may be limited. Morgan Stanley could provide investment banking services to competitors of portfolio companies,
as well as to private equity and/or private credit funds; such activities may present Morgan Stanley with a conflict of interest
vis-a-vis a Fund’s investment and may also result in a conflict in respect of the allocation of investment banking resources
to portfolio companies.
To the extent permitted by applicable law, Morgan Stanley may provide
a broad range of financial services to companies in which a Fund invests, including strategic and financial advisory services,
interim acquisition financing and other lending and underwriting or placement of securities, and Morgan Stanley generally will
be paid fees (that may include warrants or other securities) for such services. Morgan Stanley will not share any of the foregoing
interest, fees and other compensation received by it (including, for the avoidance of doubt, amounts received by the investment
adviser) with a Fund, and any advisory fees payable will not be reduced thereby.
Morgan Stanley may be engaged to act as a financial advisor to a company
in connection with the sale of such company, or subsidiaries or divisions thereof, may represent potential buyers of businesses
through its mergers and acquisition activities and may provide lending and other related financing services in connection with
such transactions. Morgan Stanley’s compensation for such activities is usually based upon realized consideration and is
usually contingent, in substantial part, upon the closing of the transaction. Under these circumstances, a Fund may be precluded
from participating in a transaction with or relating to the company being sold or participating in any financing activity related
to merger or acquisition.
To meet applicable regulatory requirements, there are periods when the
investment adviser will not engage in certain types of transactions in the securities of companies for which a broker-dealer affiliated
with Morgan Stanley is performing investment banking services. Fund shareholders will not receive notice of such instances. In
particular, when a broker-dealer affiliated with Morgan Stanley is engaged in an underwriting or other distribution of securities
of a company, the investment adviser may be prohibited from purchasing such securities on behalf of a Fund. In addition, under
certain circumstances, the investment adviser generally will not initiate transactions in the securities of companies with respect
to which affiliates of the investment adviser may have controlling interests or are affiliated.
The investment adviser believes that the nature and range of clients to
whom Morgan Stanley and its subsidiaries render investment banking and other services is such that it would be inadvisable to exclude
these companies from the Fund’s portfolio.
Morgan Stanley’s
Marketing Activities. Morgan Stanley is engaged in the business of underwriting, syndicating, brokering, administering,
servicing, arranging and advising on the distribution of a wide variety of securities and other investments in which a Fund may
invest. Subject to the restrictions of the 1940 Act, including Sections 10(f) and 17(e) thereof, a Fund may invest in transactions
in which Morgan Stanley acts as underwriter, placement agent, syndicator, broker, administrative agent, servicer, advisor, arranger
or structuring agent and receives fees or other compensation from the sponsors of such products or securities. Any fees earned
by Morgan Stanley in such capacity will not be shared with the investment adviser or the Funds. Certain conflicts of interest,
in addition to the receipt of fees or other compensation, would be inherent in these transactions. Moreover, the interests of one
of Morgan Stanley’s clients with respect to an issuer of securities in which a Fund has an investment may be adverse to the
investment adviser’s or a Fund’s best interests. In conducting the foregoing activities, Morgan Stanley will be acting
for its other clients and will have no obligation to act in the investment adviser’s or a Fund’s best interests.
Client Relationships.
Morgan Stanley has existing and potential relationships with a significant number of corporations, institutions and individuals.
In providing services to its clients, Morgan Stanley may face conflicts of interest with respect to activities recommended to or
performed for such clients, on the one hand, and a Fund, its shareholders or the entities in which the Fund invests, on the other
hand. In addition, these client relationships may present conflicts of interest in determining whether to offer certain investment
opportunities to a Fund.
In acting as principal or in providing advisory and other services to
its other clients, Morgan Stanley may engage in or recommend activities with respect to a particular matter that conflict with
or are different from activities engaged in or recommended by the investment adviser on a Fund’s behalf.
Principal Investments.
To the extent permitted by applicable law, there may be situations in which a Funds’ interests may conflict with the
interests of one or more general accounts of Morgan Stanley and its affiliates or accounts managed by Morgan Stanley or its affiliates.
This may occur because these accounts hold public and private debt and equity securities of many issuers which may be or become
portfolio companies, or from whom portfolio companies may be acquired.
Transactions with
Portfolio Companies of Affiliated Investment Accounts. The companies in which a Fund may invest may be counterparties to
or participants in agreements, transactions or other arrangements with portfolio companies or other entities of portfolio investments
of Affiliated Investment Accounts (for example, a company in which a Fund invests may retain a company in which an Affiliated Investment
Account invests to provide services or may acquire an asset from such company or vice versa). Certain of these agreements, transactions
and arrangements involve fees, servicing payments, rebates and/or other benefits to Morgan Stanley or its affiliates. For example,
portfolio entities may, including at the encouragement of Morgan Stanley, enter into agreements regarding group procurement and/or
vendor discounts. Morgan Stanley and its affiliates may also participate in these agreements and may realize better pricing or
discounts as a result of the participation of portfolio entities. To the extent permitted by applicable law, certain of these agreements
may provide for commissions or similar payments and/or discounts or rebates to be paid to a portfolio entity of an Affiliated Investment
Account, and such payments or discounts or rebates may also be made directly to Morgan Stanley or its affiliates. Under these arrangements,
a particular portfolio company or other entity may benefit to a greater degree than the other participants, and the funds, investment
vehicles and accounts (which may or may not include a Fund) that own an interest in such entity will receive a greater relative
benefit from the arrangements than the Eaton Vance funds, investment vehicles or accounts that do not own an interest therein.
Fees and compensation received by portfolio companies of Affiliated Investment Accounts in relation to the foregoing will not be
shared with a Fund or offset advisory fees payable.
Investments in Portfolio
Investments of Other Funds. To the extent permitted by applicable law, when a Fund invests in certain companies or other
entities, other funds affiliated with the investment adviser may have made or may be making an investment in such companies or
other entities. Other funds that have been or may be managed by the investment adviser may invest in the companies or other entities
in which a Fund has made an investment. Under such circumstances, a Fund and such other funds may have conflicts of interest (e.g.,
over the terms, exit strategies and related matters, including the exercise of remedies of their respective investments). If the
interests held by a Fund are different from (or take priority over) those held by such other funds, the investment adviser may
be required to make a selection at the time of conflicts between the interests held by such other funds and the interests held
by a Fund.
Allocation of Expenses.
Expenses may be incurred that are attributable to a Fund and one or more other Affiliated Investment Accounts (including in connection
with issuers in which a Fund and such other Affiliated Investment Accounts have overlapping investments). The allocation of such
expenses among such entities raises potential conflicts of interest. The investment adviser and its affiliates intend to allocate
such common expenses among a Fund and any such other Affiliated Investment Accounts on a pro rata basis or in such other manner
as the investment adviser deems to be fair and equitable or in such other manner as may be required by applicable law.
Temporary Investments.
To more efficiently invest short-term cash balances held by a Fund, the investment adviser may invest such balances on an
overnight “sweep” basis in shares of one or more money market funds or other short-term vehicles. It is anticipated
that the investment adviser to these money market funds or other short-term vehicles may be the investment adviser (or an affiliate)
to the extent permitted by applicable law, including Rule 12d1-1 under the 1940 Act. The Funds currently invests in Eaton Vance
Cash Reserves Fund, LLC (Cash Reserves Fund), an affiliated investment company managed by Eaton Vance, for this purpose. Eaton
Vance does not currently receive a fee for advisory services provided to Cash Reserves Fund.
Transactions with
Affiliates. The investment adviser and any investment sub-adviser might purchase securities from underwriters or placement
agents in which a Morgan Stanley affiliate is a member of a syndicate or selling group, as a result of which an affiliate might
benefit from the purchase through receipt of a fee or otherwise. Neither the investment adviser nor any investment sub-adviser
will purchase securities on behalf of a Fund from an affiliate that is acting as a manager of a syndicate or selling group. Purchases
by the investment adviser on behalf of a Fund from an affiliate acting as a placement agent must meet the requirements of applicable
law. Furthermore, Morgan Stanley may face conflicts of interest when the Funds use service providers affiliated with Morgan Stanley
because Morgan Stanley receives greater overall fees when they are used.
General Process for
Potential Conflicts. All of the transactions described above involve the potential for conflicts of interest between the
investment adviser, related persons of the investment adviser and/or their clients. The Advisers Act, the 1940 Act and ERISA impose
certain requirements designed to decrease the possibility of conflicts of interest between an investment adviser and its clients.
In some cases, transactions may be permitted subject to fulfillment of certain conditions. Certain other transactions may be prohibited.
In addition, the investment adviser has instituted policies and procedures designed to prevent conflicts of interest from arising
and, when they do arise, to ensure that it effects transactions for clients in a manner that is consistent with its fiduciary duty
to its clients and in accordance with applicable law. The investment adviser seeks to ensure that potential or actual conflicts
of interest are appropriately resolved taking into consideration the overriding best interests of the client.
EATON VANCE TAX-MANAGED EQUITY ASSET ALLOCATION
FUND
EATON VANCE TAX-MANAGED GLOBAL DIVIDEND INCOME
FUND
EATON VANCE TAX-MANAGED MULTI-CAP GROWTH FUND
EATON VANCE TAX-MANAGED SMALL-CAP FUND
EATON VANCE TAX-MANAGED VALUE FUND
Supplement to Prospectus
dated March 1, 2021
1. The following replaces “Management”
under “Fund Summaries – Eaton Vance Tax-Managed Multi-Cap Growth Fund“:
Management
Investment
Adviser. Boston Management and Research (“BMR”) serves as investment adviser to the Portfolio. Effective March
1, 2021, Eaton Vance Management (“Eaton Vance”) serves as investment adviser to the Fund.
Portfolio Managers
Yana
S. Barton, Vice President of Eaton Vance and BMR, has managed the Portfolio since November 2013 and the Fund since March
1, 2021.
Lewis
R. Piantedosi, Vice President of Eaton Vance and BMR, has managed the Portfolio since November 2013 and the Fund since March
1, 2021.
Douglas
R. Rogers, Vice President of Eaton Vance and BMR, has managed the Portfolio since December
2018 and the Fund since March 1, 2021.
Kenneth
D. Zinner, Vice President of Eaton Vance and BMR, has managed the Portfolio since December 2018 and the Fund since March
1, 2021.
2. The following replaces “Management”
under “Fund Summaries – Eaton Vance Tax-Managed Small-Cap Fund”:
Management
Investment
Adviser. Boston Management and Research (“BMR”) serves as investment adviser to the Portfolio. Effective March
1, 2021, Eaton Vance Management (“Eaton Vance”) serves as investment adviser to the Fund.
Portfolio Managers
Michael
D. McLean, Vice President of Eaton Vance and BMR, has managed the Portfolio since January 2015 and the Fund since March
1, 2021.
J. Griffith
Noble, Vice President of Eaton Vance and BMR, has managed the Portfolio since January 2015 and the Fund since March 1, 2021.
3. The following replaces “Management”
under “Fund Summaries – Eaton Vance Tax-Managed Value Fund”:
Management
Investment
Adviser. Boston Management and Research (“BMR”) serves as investment adviser to the Portfolio. Effective March
1, 2021, Eaton Vance Management (“Eaton Vance”) serves as investment adviser to the Fund.
Portfolio Managers
Aaron
S. Dunn, CFA, Vice President of Eaton Vance and BMR, has managed the Portfolio since December 2017 and the Fund since March
1, 2021.
Bradley
T. Galko, CFA, Vice President of Eaton Vance and BMR, has managed the Portfolio since February 2020 and the Fund since March
1, 2021.
Edward
J. Perkin, CFA, Chief Investment Officer, Equity and Vice President of Eaton Vance and BMR, has managed the Portfolio since
June 2014 and the Fund since March 1, 2021.
4. The following replaces corresponding
disclosure under “Management.” in “Management and Organization”:
Each Fund’s investment adviser is Eaton Vance Management (“Eaton
Vance”) and each Portfolio’s investment adviser is Boston Management and Research (“BMR”). Each of Eaton
Vance and BMR have offices at Two International Place, Boston, MA 02110. Eaton Vance and BMR and their predecessor organizations
have been managing assets since 1924 and managing mutual funds since 1931. Prior to March 1, 2021, Eaton Vance was a wholly owned
subsidiary and BMR was an indirect wholly owned subsidiary of Eaton Vance Corp. (“EVC”).
On March 1, 2021, Morgan Stanley acquired EVC (the “Transaction”)
and Eaton Vance and BMR became indirect, wholly-owned subsidiaries of Morgan Stanley. In connection with the Transaction,
each Portfolio, Tax-Managed Equity Asset Allocation Fund and Tax-Managed Global Dividend Income Fund each entered into a new investment
advisory agreement with its adviser and Tax-Managed Dividend Income Fund’s adviser entered into a new investment sub-advisory
agreement with EVAIL (as defined below). Each such agreement was approved by Fund shareholders or Portfolio interestholders, as
applicable, prior to the consummation of the Transaction and was effective upon its closing.
In addition, Tax-Managed Multi-Cap Growth Fund, Tax-Managed Small-Cap
Fund and Tax-Managed Value Fund shareholders have approved a new investment advisory agreement with Eaton Vance that took effect
upon the closing of the Transaction. The new agreement for each Fund is substantially similar to the new investment advisory agreement
that was approved with respect to its Portfolio in connection with the Transaction. Under each Fund’s new investment advisory
agreement, Eaton Vance does not charge an advisory fee with respect to Fund assets invested in the Portfolio or any other investment
company for which Eaton Vance or its affiliates serve as investment adviser and receive an advisory fee. Each Fund currently invests
all of its assets in the Portfolio. In the event Eaton Vance manages directly any assets of the Fund in the future, the applicable
advisory fee rate payable by the Fund will be the same as that payable by the Portfolio.
Each Fund is allocated its pro rata share of the advisory fee paid by
the Portfolio or Portfolios in which it invests, as applicable. Effective March 1, 2021, any fee reduction agreement previously
applicable to a Fund or Portfolio, as applicable, was incorporated into its new investment advisory agreement with its investment
adviser and/or its new investment sub-advisory agreement with its sub-adviser, as applicable.
Morgan Stanley (NYSE: “MS”), whose principal offices are at
1585 Broadway, New York, New York 10036, is a preeminent global financial services firm engaged in securities trading and
brokerage activities, as well as providing investment banking, research and analysis, financing and financial advisory services.
As of December 31, 2020, after giving effect to the Transaction as described above, Morgan Stanley’s asset management operations
had aggregate assets under management of approximately $1.4 trillion.
Pursuant to a sub-advisory agreement, the Tax-Managed Global Dividend
Fund’s adviser has delegated a portion of the investment management of the Fund to Eaton Vance Advisers International Ltd.
(“EVAIL”), 125 Old Broad Street, London, EC2N 1AR, United Kingdom, a registered investment adviser. The Fund’s
adviser pays EVAIL a portion of its advisory fee for sub-advisory services provided to the Fund. On March 1, 2021, upon the closing
of the Transaction, EVAIL became an indirect wholly owned subsidiary of Morgan Stanley. Prior to March 1, 2021, EVAIL was an indirect
wholly-owned subsidiary of EVC.
5. The following replaces “Tax-Managed
Multi-Cap Growth Portfolio.” under “Management.” in “Management and Organization”:
Tax-Managed
Multi-Cap Growth Fund. Under its investment advisory agreement with the Fund, Eaton Vance is entitled to receive an advisory
fee on average daily net assets per annum that are not invested in other investment companies for which Eaton Vance or its affiliates
(i) serves as adviser and (ii) receives an advisory fee. The fee is payable monthly.
Average Daily Net Assets for the Month
|
Annual Fee Rate
(for each level)
|
Up to $500 million
|
0.650%
|
$500 million but less than $1 billion
|
0.625%
|
$1 billion but less than $2.5 billion
|
0.600%
|
$2.5 billion and over
|
0.600%
|
Tax-Managed
Multi-Cap Growth Portfolio. Under its investment advisory agreement with Tax-Managed Multi-Cap Growth Portfolio, BMR receives
a monthly advisory fee as follows:
Average Daily Net Assets for the Month
|
Annual Fee Rate
(for each level)
|
Up to $500 million
|
0.650%
|
$500 million but less than $1 billion
|
0.625%
|
$1 billion but less than $2.5 billion
|
0.600%
|
$2.5 billion and over
|
0.600%
|
For the fiscal year ended October 31, 2020, the effective annual rate
of investment advisory fee paid to BMR, based on average daily net assets of the Portfolio was 0.65%.
Yana S. Barton and Lewis R. Piantedosi have served as portfolio managers
of the Portfolio since November 2013 and Douglas R. Rogers and Kenneth D. Zinner have served as portfolio managers of the Portfolio
since December 31, 2018. Each of Messrs. Piantedosi, Rogers and Zinner and Ms. Barton have served as portfolio managers of the
Fund since March 1, 2021. Ms. Barton and Mr. Piantedosi manage other Eaton Vance portfolios, have been Eaton Vance portfolio managers
for more than five years and are Vice Presidents of Eaton Vance and BMR. Messrs. Rogers and Zinner are also equity analysts and
Vice Presidents of Eaton Vance and BMR and have been with Eaton Vance for more than five years.
6. The following replaces “Tax-Managed
Small-Cap Portfolio.” under “Management.” in “Management and Organization”:
Tax-Managed
Small-Cap Fund. Under its investment advisory agreement with the Fund, Eaton Vance is entitled to receive an advisory fee
on average daily net assets per annum that are not invested in other investment companies for which Eaton Vance or its affiliates
(i) serves as adviser and (ii) receives an advisory fee. The fee is payable monthly.
Average Daily Net Assets for the Month
|
Annual Fee Rate
(for each level)
|
Up to $500 million
|
0.625%
|
$500 million but less than $1 billion
|
0.5625%
|
$1 billion but less than $1.5 billion
|
0.50%
|
$1.5 billion and over
|
0.4375%
|
Tax-Managed
Small-Cap Portfolio. Under its investment advisory agreement with Tax-Managed Small-Cap Portfolio, BMR receives a monthly
advisory fee as follows:
Average Daily Net Assets for the Month
|
Annual Fee Rate
(for each level)
|
Up to $500 million
|
0.625%
|
$500 million but less than $1 billion
|
0.5625%
|
$1 billion but less than $1.5 billion
|
0.50%
|
$1.5 billion and over
|
0.4375%
|
For the fiscal year ended October 31, 2020, the effective annual rate
of investment advisory fee paid to BMR, based on average daily net assets of the Portfolio was 0.625%.
Michael D. McLean and J. Griffith Noble have served as
portfolio managers of the Portfolio since January 2015 and of the Fund since March 1, 2021. Messrs. McLean and Noble manage other
Eaton Vance portfolios, have been Eaton Vance portfolio managers for more than five years and are Vice Presidents of Eaton Vance
and BMR.
7. The following replaces “Tax-Managed
Value Portfolio.” under “Management.” in “Management and Organization”:
Tax-Managed
Value Fund. Under its investment advisory agreement with the Fund, Eaton Vance is entitled to receive an advisory fee on
average daily net assets per annum that are not invested in other investment companies for which Eaton Vance or its affiliates
(i) serves as adviser and (ii) receives an advisory fee. The fee is payable monthly.
Average Daily Net Assets for the Month
|
Annual Fee Rate
(for each level)
|
Up to $500 million
|
0.650%
|
$500 million but less than $1 billion
|
0.625%
|
$1 billion but less than $2 billion
|
0.6000%
|
$2 billion but less than $5 billion
|
0.5750%
|
$5 billion and over
|
0.5550%
|
Tax-Managed
Value Portfolio. Under its investment advisory agreement with Tax-Managed Value Portfolio, BMR receives a monthly advisory
fee as follows:
Average Daily Net Assets for the Month
|
Annual Fee Rate
(for each level)*
|
Up to $500 million
|
0.650%
|
$500 million but less than $1 billion
|
0.625%
|
$1 billion but less than $2 billion
|
0.6000%
|
$2 billion but less than $5 billion
|
0.5750%
|
$5 billion and over
|
0.5550%
|
|
*
|
Prior to March 1, 2021, the Portfolio’s advisory fee was reduced pursuant to a fee reduction agreement effective March
27, 2006. Following the closing of the Transaction, as described above, this fee reduction agreement was incorporated into the
Portfolio's new investment advisory agreement with BMR.
|
For the fiscal year ended October 31, 2020, the effective annual rate
of investment advisory fee paid to BMR, based on average daily net assets of the Portfolio was 0.64%.
Aaron S. Dunn, CFA, Bradley T. Galko, CFA and Edward J. Perkin, CFA manage
the Portfolio and the Fund. Each of Messrs. Dunn, Galko and Perkin have managed the Fund since March 1, 2021. Mr. Dunn has served
as portfolio manager of the Portfolio since December 2017 and manages other Eaton Vance portfolios. He is a Vice President of Eaton
Vance and BMR and has been with Eaton Vance for more than five years. Mr. Galko has served as portfolio manager of the Portfolio
since February 2020 and manages other Eaton Vance portfolios. He is a Vice President of Eaton Vance and BMR and has been with Eaton
Vance for more than five years. Mr. Perkin has served as portfolio manager of the Portfolio since June 2014 and manages other Eaton
Vance portfolios. Mr. Perkin is Chief Investment Officer, Equity of the Eaton Vance organization, has been a portfolio manager
at Eaton Vance for more than five years and is a Vice President of Eaton Vance and BMR.
8. The following replaces the
first paragraph under “Payments to Financial Intermediaries.” in “Purchasing Shares”:
Payments to Financial
Intermediaries. In addition to payments disclosed under “Sales Charges” below, the principal underwriter, out
of its own resources, may make cash payments to certain financial intermediaries (which may include affiliates of the principal
underwriter and investment adviser) who provide marketing support, transaction processing and/or administrative services and, in
some cases, include some or all Eaton Vance funds in preferred or specialized selling programs. Payments made by the principal
underwriter to a financial intermediary may be significant and are typically in the form of fees based on Fund sales, assets, transactions
processed and/or accounts attributable to that financial intermediary. Financial intermediaries also may receive amounts from the
principal underwriter in connection with educational or due diligence meetings that include information concerning Eaton Vance
funds. The principal underwriter may pay or allow other promotional incentives or payments to financial intermediaries to the extent
permitted by applicable laws and regulations.
9. The following replaces “Fund
Purchases through Edward D. Jones & Co., L.P. (“Edward Jones”)” under “Appendix A – Financial
Intermediary Sales Charge Variations”:
Policies Regarding Transactions Through Edward
D. Jones & Co., L.P. (“Edward Jones”)
The following information has been provided by Edward Jones:
Effective on or after March 1, 2021, the following information supersedes
prior information with respect to transactions and positions held in fund shares through an Edward Jones system. Clients of Edward
Jones (also referred to as “shareholders”) purchasing fund shares on the Edward Jones commission and fee-based platforms
are eligible only for the following sales charge discounts (also referred to as “breakpoints”) and waivers, which can
differ from discounts and waivers described elsewhere in the mutual fund prospectus or statement of additional information (“SAI”)
or through another broker-dealer. In all instances, it is the shareholder's responsibility to inform Edward Jones at the time of
purchase of any relationship, holdings of fund family or other facts qualifying the purchaser for discounts or waivers. Edward
Jones can ask for documentation from the shareholder of such circumstance. Shareholders should contact Edward Jones if they have
questions regarding their eligibility for these discounts and waivers.
Breakpoints
|
·
|
Breakpoint pricing, otherwise known as volume pricing, at dollar thresholds as described in the prospectus.
|
Rights of Accumulation (“ROA”)
|
·
|
The applicable sales charge on a purchase of Class A shares is determined by taking into account all share classes (except
certain money market funds and any assets held in group retirement plans) of the mutual fund family held by the shareholder or
in an account grouped by Edward Jones with other accounts for the purpose of providing certain pricing considerations (“pricing
groups”). If grouping assets as a shareholder, this includes all share classes held on the Edward Jones platform and/or held
on another platform. The inclusion of eligible fund family assets in the ROA calculation is dependent on the shareholder notifying
Edward Jones of such assets at the time of calculation. Money market funds are included only if such shares were sold with a sales
charge at the time of purchase or acquired in exchange for shares purchased with a sales charge.
|
|
·
|
The employer maintaining a SEP IRA plan and/or SIMPLE IRA plan may elect to establish or change ROA for the IRA accounts associated
with the plan to a plan-level grouping as opposed to including all share classes at a shareholder or pricing group level.
|
|
·
|
ROA is determined by calculating the higher of cost minus redemptions or market value (current shares x NAV).
|
Letter of Intent (“LOI”)
|
·
|
Through a LOI, shareholders can receive the sales charge and breakpoint discounts for purchases shareholders intend to make
over a 13-month period from the date Edward Jones receives the LOI. The LOI is determined by calculating the higher of cost or
market value of qualifying holdings at LOI initiation in combination with the value that the shareholder intends to buy over a
13-month period to calculate the front-end sales charge and any breakpoint discounts. Each purchase the shareholder makes during
that 13-month period will receive the sales charge and breakpoint discount that applies to the total amount. If during the 13-month
period the shareholder redeems any of the shares purchased pursuant to a LOI, the value of the redeemed shares will not be included
for purposes of satisfying the LOI. The inclusion of eligible fund family assets in the LOI calculation is dependent on the shareholder
notifying Edward Jones of such assets at the time of calculation. Purchases made before the LOI is received by Edward Jones are
not adjusted under the LOI and will not reduce the sales charge previously paid. Sales charges will be adjusted if LOI is not met.
|
|
·
|
If the employer maintaining a SEP IRA plan and/or SIMPLE IRA plan has elected to establish or change ROA for the IRA accounts
associated with the plan to a plan-level grouping, LOIs will also be at the plan-level and may only be established by the employer.
|
Front-end Sales Charge Waivers
Sales charges are waived for the following shareholders and
in the following situations:
|
·
|
Associates of Edward Jones and its affiliates and their family members who are in the same pricing group (as determined by
Edward Jones under its policies and procedures) as the associate. This waiver will continue for the remainder of the associate's
life if the associate retires from Edward Jones in good-standing and remains in good standing pursuant to Edward Jones' policies
and procedures.
|
|
·
|
Shares purchased in an Edward Jones fee-based program.
|
|
·
|
Shares purchased through reinvestment of capital gains distributions and dividend reinvestment.
|
|
·
|
Shares purchased from the proceeds of redeemed shares of the same fund family so long as the following conditions are met:
1) the proceeds are from the sale of shares within 60 days of the purchase, and 2) the sale and purchase are made in the same share
class and the same account or the purchase is made in an individual retirement account with proceeds from liquidations in a non-retirement
account.
|
|
·
|
Shares exchanged into Class A shares from another share class so long as the exchange is into the same fund and was initiated
at the discretion of Edward Jones. Edward Jones is responsible for any remaining Contingent Deferred Sales Charge (“CDSC”)
due to the fund company or its affiliate, if applicable. Any future purchases are subject to the applicable sales charge as disclosed
in the prospectus.
|
|
·
|
Exchanges from Class C shares to Class A shares of the same fund, generally, in the 84th month following the anniversary of
the purchase date or earlier at the discretion of Edward Jones.
|
CDSC Waivers
If the shareholder purchases shares that are subject to a CDSC
and those shares are redeemed before the CDSC is expired, the shareholder is responsible to pay the CDSC except in the following
conditions:
|
·
|
The death or disability of the shareholder.
|
|
·
|
Systematic withdrawals with up to 10% per year of the account value.
|
|
·
|
Return of excess contributions from an Individual Retirement Account (IRA).
|
|
·
|
Shares sold as part of a required minimum distribution for IRA and retirement accounts if the redemption is taken in or after
the year the shareholder reaches qualified age based on applicable IRS regulations.
|
|
·
|
Shares sold to pay Edward Jones fees or costs in such cases where the transaction is initiated by Edward Jones. Edward Jones
is responsible for any remaining CDSC due to the fund company or its affiliate, if applicable.
|
|
·
|
Shares exchanged in an Edward Jones fee-based program. Edward Jones is responsible for any remaining CDSC due to the fund company
or its affiliate, if applicable.
|
|
·
|
Shares acquired through NAV reinstatement.
|
|
·
|
Shares redeemed at the discretion of Edward Jones for Minimum Balances as described below.
|
******************************************************************************
Other Important Information Regarding Transactions Through Edward Jones
Minimum Purchase Amounts
|
·
|
Initial purchase minimum: $250
|
|
·
|
Subsequent purchase minimum: none
|
Minimum Balances
|
·
|
Edward Jones has the right to redeem at its discretion fund holdings with a balance of $250 or less. The following are examples
of accounts that are not included in this policy:
|
|
·
|
A fee-based account held on an Edward Jones platform
|
|
·
|
A 529 account held on an Edward Jones platform
|
|
·
|
An account with an active systematic investment plan or LOI
|
Exchanging Share Classes
At any time it deems necessary, Edward Jones has the authority to exchange
at NAV a shareholder's holdings in a fund to Class A shares of the same fund. Edward Jones is responsible for any remaining CDSC
due to the fund company or its affiliate, if applicable. Any future purchases are subject to the applicable sales charge as disclosed
in the prospectus.
March 1, 2021
|
37960 3.1.21
|
EATON VANCE TAX-MANAGED EQUITY ASSET ALLOCATION
FUND
EATON VANCE TAX-MANAGED GLOBAL DIVIDEND INCOME
FUND
EATON VANCE TAX-MANAGED MULTI-CAP GROWTH FUND
EATON VANCE TAX-MANAGED SMALL-CAP FUND
EATON VANCE TAX-MANAGED VALUE FUND
Supplement to Statement
of Additional Information dated March 1, 2021
1. The following replaces the
first paragraph under “Fund Management.” in “Management and Organization”:
Fund Management.
The Trustees of the Trust are responsible for the overall management and supervision of the affairs
of the Trust. The Trustees of each Portfolio are responsible for the overall management and supervision of each Portfolio. The
Board members and officers of the Trust and each Portfolio are listed below. Except as indicated, each individual has held the
office shown or other offices in the same company for the last five years. Board members hold indefinite terms of office. Each
Trustee holds office until his or her successor is elected and qualified, subject to a prior death, resignation, retirement, disqualification
or removal. Under the terms of each Fund’s and the Portfolios’ current Trustee retirement policy, an Independent
Trustee must retire and resign as a Trustee on the earlier of: (i) the first day of July following his or her 74th birthday; or
(ii), with limited exception, December 31st of the 20th year in which he or she has served as a Trustee. However, if such retirement
and resignation would cause each Fund or Portfolio to be out of compliance with Section 16 of the 1940 Act or any other regulations
or guidance of the SEC, then such retirement and resignation will not become effective until such time as action has been taken
for each Fund or Portfolio to be in compliance therewith. The “noninterested Trustees” consist of those Trustees
who are not “interested persons” of the Trust and each Portfolio, as that term is defined under the 1940 Act. The business
address of each Board member and officer is Two International Place, Boston, Massachusetts 02110. As used in this SAI, “EVC”
refers to Eaton Vance Corp., “EV” refers to Eaton Vance, Inc., “Eaton Vance” refers to Eaton Vance Management
and “EVD” refers to Eaton Vance Distributors, Inc. (see “Principal Underwriter” under “Other Service
Providers”). EV is the trustee of each of Eaton Vance and BMR. Effective March 1, 2021, each of Eaton Vance, BMR, EVD and
EV are indirect wholly-owned subsidiaries of Morgan Stanley. Each officer affiliated with Eaton Vance may hold a position with
other Eaton Vance affiliates that is comparable to his or her position with Eaton Vance listed below.
2. The following replaces the
Thomas E. Faust Jr. row in the Trustees table and in his biographical narrative in “Management and Organization”:
THOMAS E. FAUST JR.
1958
|
|
Trustee
|
|
Since 2007
|
|
Chairman of Morgan Stanley Investment Management, Inc. (MSIM), Director and President of EV, Chief Executive Officer and President of Eaton Vance and BMR, and Director of EVD. Formerly, Chairman, Chief Executive Officer and President of EVC. Trustee and/or officer of 141 registered investment companies. Mr. Faust is an interested person because of his positions with MSIM, BMR, Eaton Vance, EVD and EV, which are affiliates of the Trust and each Portfolio, and his former position with EVC, which was an affiliate of the Trust and each Portfolio prior to March 1, 2021.
|
|
141
|
|
Formerly, Director of EVC (2007-2021) and Hexavest Inc. (2012-2021) (investment management firm).
|
Thomas E. Faust
Jr. Mr. Faust has served as a member of the Eaton Vance Fund Boards since 2007. Effective March 1, 2021, he is Chairman
of MSIM. He is also Director and President of EV, Chief Executive Officer and President of Eaton Vance and BMR, and Director of
EVD. Mr. Faust previously served as Chairman and Chief Executive Officer of EVC from 2007 through March 1, 2021 and as President
of EVC from 2006 through March 1, 2021. Mr. Faust served as a Director of Hexavest Inc. from 2012-2021. From 2016 through 2019,
Mr. Faust served as a Director of SigFig Wealth Management LLC. Mr. Faust previously served as an equity analyst, portfolio manager,
Director of Equity Research and Management and Chief Investment Officer of Eaton Vance from 1985-2007. He holds B.S. degrees in
Mechanical Engineering and Economics from the Massachusetts Institute of Technology and an MBA from Harvard Business School. Mr.
Faust has been a Chartered Financial Analyst since 1988. He is a trustee and member of the executive committee of the Boston Symphony
Orchestra, Inc. and trustee emeritus of Wellesley College.
3. The following replaces the
first and second paragraphs under “Investment Advisory Services.” in “Investment Advisory and Administrative
Services”:
Investment Advisory
Services. As described in the Prospectus, upon the closing of the transaction by which Morgan Stanley acquired EVC, each
Fund and each Portfolio entered into a new investment advisory agreement with Eaton Vance or BMR, as applicable, and in the case
of Tax-Managed Global Dividend Income Fund, the investment adviser entered into a new investment sub-advisory agreement with EVAIL.
Each investment adviser manages the investments and affairs of each Portfolio and each Fund and provides related office facilities
and personnel subject to the supervision of the Trust's Board, in
the case of a Fund, or a Portfolio’s Board. Each investment adviser
and, in the case of Tax-Managed Global Dividend Income Fund, the sub-adviser, furnish investment research, advice and supervision,
furnish an investment program and determine what securities will be purchased, held or sold by each Portfolio and each Fund and
what portion, if any, of each Portfolios', and each Fund’s assets will be held uninvested. Each Investment Advisory Agreement
and Investment Sub-Advisory Agreement requires the investment adviser or sub-adviser, as the case may be, to pay the compensation
and expenses of all officers and Trustees who are members of the investment adviser's or sub-adviser's organization and all personnel
of the investment adviser or sub-adviser performing services relating to research and investment activities.
As described in the Prospectus, Eaton Vance serves as investment adviser
for Tax-Managed Multi-Cap Growth Fund, Tax-Managed Small-Cap Fund and Tax-Managed Value Fund effective March 1, 2021. For a description
of the compensation that a Portfolio or a Fund pays the investment adviser under its investment advisory agreement, see the Prospectus.
4. The following replaces the
last paragraph under “Investment Advisory Services.” in “Investment Advisory and Administrative Services”:
Each Investment Advisory Agreement and Investment Sub-Advisory Agreement
with the investment adviser or sub-adviser continues in effect through and including the second anniversary of its execution and
shall continue in full force and effect indefinitely thereafter, but only so long as such continuance after such second anniversary
is specifically approved at least annually (i) by the vote of a majority of the noninterested Trustees of the Trust, in the case
of each Fund, or the Portfolio, in the case of each Portfolio, cast in person at a meeting specifically called for the purpose
of voting on such approval and (ii) by the Board of the Trust, in the case of each Fund, or the Portfolio, in the case of each
Portfolio, or by vote of a majority of the outstanding voting securities of the Portfolio or Fund. Each Agreement may be terminated
at any time without penalty on sixty (60) days’ written notice by either party, or by vote of the majority of the outstanding
voting securities of the Portfolio or Fund, and each Agreement will terminate automatically in the event of its assignment. Each
Agreement provides that the investment adviser or sub-adviser may render services to others. Each Agreement also provides that
the investment adviser or sub-adviser shall not be liable for any loss incurred in connection with the performance of its duties,
or action taken or omitted under the Agreement, in the absence of willful misfeasance, bad faith, gross negligence or reckless
disregard of its obligations and duties thereunder, or for any losses sustained in the acquisition, holding or disposition of any
security or other investment. Each Agreement is not intended to, and does not, confer upon any person not a party to it any right,
benefit or remedy of any nature, except that the new sub-advisory agreement with EVAIL (as described above) states that Tax-Managed
Global Dividend Income Fund is a third party beneficiary of such agreement.
5. The following replaces “Information
About BMR and Eaton Vance.” in “Investment Advisory and Administrative Services”:
Information About
BMR and Eaton Vance. BMR and Eaton Vance are business trusts organized under the laws of the Commonwealth of Massachusetts.
EV serves as trustee of BMR and Eaton Vance. As described in the Prospectus, following the closing of the Transaction on March
1, 2021, EV, Eaton Vance and BMR became indirect wholly-owned subsidiaries of Morgan Stanley (NYSE: MS), a preeminent global financial
services firm engaged in securities trading and brokerage activities, as well as providing investment banking, research and analysis,
financing and financial advisory services.
Prior to March 1, 2021, EV and Eaton Vance were wholly-owned subsidiaries
of EVC, a Maryland corporation and publicly-held holding company and BMR was an indirect wholly owned subsidiary of EVC. EVC through
its subsidiaries and affiliates engaged primarily in investment management, administration and marketing activities. The Directors
of EVC were Thomas E. Faust Jr., Ann E. Berman, Leo I. Higdon, Jr., Paula A. Johnson, Brian D. Langstraat, Dorothy E. Puhy, Winthrop
H. Smith, Jr. and Richard A. Spillane, Jr. All shares of the outstanding Voting Common Stock of EVC were deposited in a Voting
Trust, the Voting Trustees of which were Mr. Faust, Paul W. Bouchey, Craig R. Brandon, Daniel C. Cataldo, Michael A. Cirami, Cynthia
J. Clemson, James H. Evans, Maureen A. Gemma, Laurie G. Hylton, Mr. Langstraat, Thomas Lee, Frederick S. Marius, David C. McCabe,
Edward J. Perkin, Lewis R. Piantedosi, Charles B. Reed, Craig P. Russ, Thomas C. Seto, John L. Shea, Eric A. Stein, John H. Streur,
Andrew N. Sveen, Payson F. Swaffield, R. Kelly Williams and Matthew J. Witkos (all of whom are or were officers of Eaton Vance
or its affiliates). The Voting Trustees had unrestricted voting rights for the election of Directors of EVC. Prior to March 1,
2021, all of the outstanding voting trust receipts issued under said Voting Trust were owned by certain of the officers of BMR
and Eaton Vance who may also have been officers, or officers and Directors of EVC and EV. As indicated under “Management
and Organization,” all of the officers of the Trust (as well as Mr. Faust who is also a Trustee) are employees of Eaton Vance
and/or BMR.
6. The following replaces “Information
About EVAIL.” in “Investment Advisory and Administrative Services”:
Information About
EVAIL. EVAIL provides investment advice to institutional clients and pooled investment vehicles. As described in the Prospectus,
following the closing of the Transaction on March 1, 2021, EVAIL became an indirect, wholly-owned subsidiary of Morgan Stanley.
Prior to March 1, 2021, EVAIL was an indirect wholly-owned subsidiary of EVC. EVAIL was originally organized in 2015.
7. The following replaces “Compensation
Structure for Eaton Vance, BMR and EVAIL.” and “Method to Determine Compensation.” under “Portfolio Managers.”
in “Investment Advisory and Administrative Services”:
Compensation Structure
for Eaton Vance, BMR and EVAIL. Compensation of the investment adviser's and sub-adviser's (collectively as used herein,
the “investment adviser”) portfolio managers and other investment professionals has the following primary components:
(1) a base salary, (2) an annual cash bonus, and (3) annual non-cash compensation consisting of restricted shares of Morgan Stanley
stock that are subject to a fixed vesting and distribution schedule. The investment adviser’s investment professionals also
receive certain retirement, insurance and other benefits that are broadly available to the investment adviser’s employees.
Compensation of the investment adviser’s investment professionals is reviewed primarily on an annual basis. Cash bonuses,
stock-based compensation awards, and adjustments in base salary are typically paid or put into effect at or shortly after the December
31st fiscal year end of Morgan Stanley.
Method to Determine
Compensation. The investment adviser compensates its portfolio managers based primarily on the scale and complexity
of their portfolio responsibilities and the total return performance of managed funds and accounts versus the benchmark(s) stated
in the prospectus, as well as an appropriate peer group (as described below). In addition to rankings within peer groups of funds
on the basis of absolute performance, consideration may also be given to relative risk-adjusted performance. Risk-adjusted performance
measures include, but are not limited to, the Sharpe ratio, which uses standard deviation and excess return to determine reward
per unit of risk. Performance is normally based on periods ending on the September 30th preceding fiscal year end. Fund performance
is normally evaluated primarily versus peer groups of funds as determined by Lipper Inc. and/or Morningstar, Inc. When a fund’s
peer group as determined by Lipper or Morningstar is deemed by the investment adviser’s management not to provide a fair
comparison, performance may instead be evaluated primarily against a custom peer group or market index. In evaluating the performance
of a fund and its manager, primary emphasis is normally placed on three-year performance, with secondary consideration of performance
over longer and shorter periods. For funds that are tax-managed or otherwise have an objective of after-tax returns, performance
is measured net of taxes. For other funds, performance is evaluated on a pre-tax basis. For funds with an investment objective
other than total return (such as current income), consideration will also be given to the fund’s success in achieving its
objective. For managers responsible for multiple funds and accounts, investment performance is evaluated on an aggregate basis,
based on averages or weighted averages among managed funds and accounts. Funds and accounts that have performance-based advisory
fees are not accorded disproportionate weightings in measuring aggregate portfolio manager performance.
The compensation of portfolio managers with other job responsibilities (such
as heading an investment group or providing analytical support to other portfolios) will include consideration of the scope of
such responsibilities and the managers’ performance in meeting them.
The investment adviser seeks to compensate portfolio managers commensurate
with their responsibilities and performance, and competitive with other firms within the investment management industry. The investment
adviser participates in investment-industry compensation surveys and utilizes survey data as a factor in determining salary, bonus
and stock-based compensation levels for portfolio managers and other investment professionals. Salaries, bonuses and stock-based
compensation are also influenced by the operating performance of the investment adviser and Morgan Stanley. The overall annual
cash bonus pool is generally based on a substantially fixed percentage of pre-bonus adjusted operating income. While the salaries
of the investment adviser’s portfolio managers are comparatively fixed, cash bonuses and stock-based compensation may fluctuate
significantly from year to year, based on changes in manager performance and other factors as described herein. For a high performing
portfolio manager, cash bonuses and stock-based compensation may represent a substantial portion of total compensation.
8. The following replaces the
first two paragraphs in “Other Service Providers”:
Principal Underwriter.
Eaton Vance Distributors, Inc. (“EVD”), Two International Place, Boston, MA 02110 is
the principal underwriter of each Fund. The principal underwriter acts as principal in selling shares under a Distribution Agreement
with the Trust. The expenses of printing copies of prospectuses used to offer shares and other selling literature and of advertising
are borne by the principal underwriter. The fees and expenses of qualifying and registering and maintaining qualifications and
registrations of a Fund and its shares under federal and state securities laws are borne by the Fund. The Distribution Agreement
is renewable annually by the members of the Board (including a majority of the noninterested Trustees who have no direct or indirect
financial interest in the operation of the Distribution Agreement or any applicable Distribution Plan), may be terminated on sixty
days’ notice either by such Trustees or by vote of a majority of the outstanding Fund shares or on six months’ notice
by the principal underwriter and is automatically terminated upon assignment. The principal underwriter distributes shares on a
“best efforts” basis under which it is required to take and pay for only such shares as may be sold. Effective March
1, 2021, EVD is an indirect wholly-owned subsidiary of Morgan Stanley. Prior to March 1, 2021, EVD was a direct, wholly-owned subsidiary
of EVC. Mr. Faust is also a Director of EVD. EVD also serves as placement agent for the Portfolio, if applicable.
Custodian.
State Street Bank and Trust Company (“State Street”), State Street Financial Center,
One Lincoln Street, Boston, MA 02111, serves as custodian to each Fund and Portfolio, if applicable. State Street has custody of
all cash and securities representing a Fund’s interest in the Portfolio, has custody of the Portfolio’s and each
Fund's assets, maintains the general ledger of the Portfolio and each Fund and computes the daily net asset value of interests
in the Portfolio and the net asset value of shares of each Fund. In such capacity it attends to details in connection with the
sale, exchange, substitution, transfer or other dealings with each Fund's and the Portfolio’s investments, receives and disburses
all funds and performs various other ministerial duties upon receipt of proper instructions from the Trust and the Portfolio. State
Street also provides services in connection with the preparation of shareholder reports and the electronic filing of such reports
with the SEC.
9. The following replaces the
first, second, fourth, sixth and seventh paragraphs in “Portfolio Securities Transactions”:
Decisions concerning the execution of portfolio security transactions,
including the selection of the market and the broker-dealer firm or other financial intermediary (each an “intermediary”),
are made by the investment adviser. Each Fund and each Portfolio is responsible for the expenses associated with its portfolio
transactions. The investment adviser is also responsible for the execution of transactions for all other accounts managed by it.
The investment adviser places the portfolio security transactions for execution with one or more intermediaries firms. The investment
adviser uses its best efforts to obtain execution of portfolio security transactions at prices that, in the investment adviser’s
judgment, are advantageous to the client and at a reasonably competitive spread or (when a disclosed commission is being charged)
at reasonably competitive commission rates. In seeking such execution, the investment adviser will use its best judgment in evaluating
the terms of a transaction, and will give consideration to various relevant factors, which may include, without limitation, the
full range and quality of the intermediary’s services, responsiveness of the intermediary to the investment adviser, the
size and type of the transaction, the nature and character of the market for the security, the confidentiality, speed and certainty
of effective execution required for the transaction, the general execution and operational capabilities of the intermediary, the
reputation, reliability, experience and financial condition of the intermediary, the value and quality of the services rendered
by the intermediary in this and other transactions, and the amount of the spread or commission, if any. In addition, the investment
adviser may consider the receipt of Research Services (as defined below), provided it does not compromise the investment adviser’s
obligation to seek best overall execution for a Fund or Portfolio and is otherwise in compliance with applicable law. The investment
adviser may engage in portfolio transactions with an intermediary that sells shares of Eaton Vance funds, provided such transactions
are not directed to that intermediary as compensation for the promotion or sale of such shares.
As described in the Prospectus, following the closing of the Transaction
on March 1, 2021, the investment adviserbecame an “affiliated person,” as defined in the 1940 Act, of Morgan Stanley
and its affiliates, including certain intermediaries (as previously defined). As a result, the investment adviser is subject to
certain restrictions regarding transactions with Morgan Stanley-affiliated intermediaries, as set forth in the 1940 Act. Under
certain circumstances, such restrictions may limit the investment adviser’s ability to place portfolio transactions on behalf
of a Fund or Portfolio at the desired time or price. Any transaction the investment adviser enters into with a Morgan Stanley-affiliated
intermediary on behalf of a Fund or Portfolio will be done in compliance with applicable laws, rules, and regulations; will be
subject to any restrictions contained in a Fund’s or Portfolio’s investment advisory agreement; will be subject to
the investment adviser’s duty to seek best execution; and, will comply with any applicable policies and procedures of the
investment adviser, as described below.
Subject to the overriding objective of obtaining the best execution of
orders and applicable rules and regulations, as described above, a Fund or Portfolio may use an affiliated intermediary, including
a Morgan Stanley-affiliated intermediary, to effect Fund or Portfolio portfolio transactions, including transactions in futures
contracts and options on futures contracts, under procedures adopted by the Board. In order to use such affiliated intermediaries,
the Fund’s or Portfolio’s Board must approve and periodically review procedures reasonably designed to ensure that
commission rates and other remuneration paid to the affiliated intermediaries are fair and reasonable in comparison to those of
other intermediaries for comparable transactions involving similar securities being purchased or sold during a comparable time
period.
Pursuant to an order issued by the SEC, a Fund or Portfolio is permitted
to engage in principal transactions in money market instruments, subject to certain conditions, with Morgan Stanley & Co. LLC,
a broker-dealer affiliated with Morgan Stanley.
Transactions on stock exchanges and other agency transactions involve the
payment of negotiated brokerage commissions. Such commissions vary among different broker-dealer firms, and a particular broker-dealer
may charge different commissions according to such factors as the difficulty and size of the transaction and the volume of business
done with such broker-dealer. Transactions in foreign securities often involve the payment of brokerage commissions, which may
be higher than those in the United States. There is generally no stated commission in the case of securities traded in the over-the-counter
markets including transactions in fixed-income securities which are generally purchased and sold on a net basis (i.e., without
commission) through intermediaries and banks acting for their own account rather than as brokers. Such intermediaries attempt to
profit from such transactions by buying at the bid price and selling at the higher asked price of the market for such obligations,
and the difference between the bid and asked price is customarily referred to as the spread. Fixed-income transactions may also
be transacted directly with the issuer of the obligations. In an underwritten offering the price paid often
includes a disclosed fixed commission or discount retained by the underwriter
or dealer. Although spreads or commissions paid on portfolio security transactions will, in the judgment of the investment adviser,
be reasonable in relation to the value of the services provided, commissions exceeding those which another firm might charge may
be paid to intermediaries who were selected to execute transactions on behalf of the investment adviser’s clients in part
for providing brokerage and research services to the investment adviser as permitted by applicable law.
Research Services provided by (and produced by) broker-dealers that execute
portfolio transactions or from affiliates of executing broker-dealers are referred to as “Proprietary Research.” Except
for trades executed in jurisdictions where such consideration is not permissible, the investment adviser may and does consider
the receipt of Proprietary Research Services as a factor in selecting broker dealers to execute client portfolio transactions,
provided it does not compromise the investment adviser’s obligation to seek best overall execution. In jurisdictions where
permissible, the investment adviser also may consider the receipt of Research Services under so called “client commission
arrangements” or “commission sharing arrangements” (both referred to as “CCAs”) as a factor in selecting
broker dealers to execute transactions, provided it does not compromise the investment adviser’s obligation to seek best
overall execution. Under a CCA arrangement, the investment adviser may cause client accounts to effect transactions through a broker-dealer
and request that the broker-dealer allocate a portion of the commissions paid on those transactions to a pool of commission credits
that are paid to other firms that provide Research Services to the investment adviser. Under a CCA, the broker-dealer that provides
the Research Services need not execute the trade. Participating in CCAs may enable the investment adviser to consolidate payments
for research using accumulated client commission credits from transactions executed through a particular broker-dealer to periodically
pay for Research Services obtained from and provided by other firms, including other broker-dealers that supply Research Services.
The investment adviser believes that CCAs offer the potential to optimize the execution of trades and the acquisition of a variety
of high quality Research Services that the investment adviser might not be provided access to absent CCAs. The investment adviser
may enter into CCA arrangements with a number of broker-dealers and other firms, including certain affiliates of the investment
adviser. The investment adviser will only enter into and utilize CCAs to the extent permitted by Section 28(e) and other applicable
law.
The investment companies sponsored by the investment adviser or certain
of its affiliates also may allocate brokerage commissions to acquire information relating to the
performance, fees and expenses of such companies and other investment companies, which information is used by the members
of the Board of such companies to fulfill their responsibility to oversee the quality of the services provided to various entities,
including the investment adviser, to such companies. Such companies may also pay cash for such information.
Securities considered as investments for
each Fund and Portfolio may also be appropriate for other investment accounts managed by the investment adviser or certain of its
affiliates. Whenever decisions are made to buy or sell securities by each Fund or Portfolio and one or more of such other accounts
simultaneously, the investment adviser will allocate the security transactions (including “new” issues) in a manner
which it believes to be equitable under the circumstances. As a result of such allocations, there may be instances where each Fund
or Portfolio will not participate in a transaction that is allocated among other accounts. If an aggregated order cannot be filled
completely, allocations will generally be made on a pro rata basis. An order may not be allocated on a pro rata basis where, for
example: (i) consideration is given to portfolio managers who have been instrumental in developing or negotiating a particular
investment; (ii) consideration is given to an account with specialized investment policies that coincide with the particulars of
a specific investment; (iii) pro rata allocation would result in odd-lot or de minimis amounts being allocated to a portfolio or
other client; or (iv) where the investment adviser reasonably determines that departure from a pro rata allocation is advisable.
While these aggregation and allocation policies could have a detrimental effect on the price or amount of the securities available
to each Fund or Portfolio from time to time, it is the opinion of the members of the Board that the benefits from the investment
adviser organization outweigh any disadvantage that may arise from exposure to simultaneous transactions.
10. The following is added as
a new section immediately prior to “Financial Statements”:
POTENTIAL CONFLICTS OF INTEREST
As a diversified global financial services firm, Morgan Stanley engages
in a broad spectrum of activities, including financial advisory services, investment management activities, lending, commercial
banking, sponsoring and managing private investment funds, engaging in broker-dealer transactions and principal securities, commodities
and foreign exchange transactions, research publication and other activities. In the ordinary course of its business, Morgan Stanley
is a full-service investment banking and financial services firm and therefore engages in activities where Morgan Stanley’s
interests or the interests of its clients may conflict with the interests of a Fund or Portfolio, if applicable, (collectively
for the purposes of this section, “Fund” or “Funds”). Morgan Stanley advises clients and sponsors, manages
or advises other investment funds and investment programs, accounts and businesses (collectively, together with the Funds, any
new or successor funds, programs, accounts or businesses, the ‘‘Affiliated Investment Accounts’’) with
a wide variety of investment objectives that in some instances may overlap or conflict with a Fund’s investment objectives
and present conflicts of interest. In addition, Morgan Stanley may also from time to time create new or successor Affiliated Investment
Accounts that may compete with a Fund and present similar conflicts of interest. The discussion below enumerates
certain actual, apparent and potential conflicts of interest. There is no assurance that conflicts of interest will be resolved
in favor of Fund shareholders and, in fact, they may not be. Conflicts of interest not described below may also exist.
Material Non-public
and Other Information. It is expected that confidential or material non-public information regarding an investment or potential
investment opportunity may become available to the investment adviser. If such information becomes available, the investment adviser
may be precluded (including by applicable law or internal policies or procedures) from pursuing an investment or disposition opportunity
with respect to such investment or investment opportunity.
The investment adviser may also from time to time be subject to contractual
‘‘stand-still’’ obligations and/or confidentiality obligations that may restrict its ability to trade in
certain investments on a Fund’s behalf. In addition, the investment adviser may be precluded from disclosing such information
to an investment team, even in circumstances in which the information would be beneficial if disclosed. Therefore, the investment
team may not be provided access to material non-public information in the possession of Morgan Stanley that might be relevant to
an investment decision to be made on behalf of a Fund, and the investment team may initiate a transaction or sell an investment
that, if such information had been known to it, may not have been undertaken. In addition, certain members of the investment team
may be recused from certain investment-related discussions so that such members do not receive information that would limit their
ability to perform functions of their employment with the investment adviser or its affiliates unrelated to that of a Fund. Furthermore,
access to certain parts of Morgan Stanley may be subject to third party confidentiality obligations and to information barriers
established by Morgan Stanley in order to manage potential conflicts of interest and regulatory restrictions, including without
limitation joint transaction restrictions pursuant to the 1940 Act. Accordingly, the investment adviser’s ability to source
investments from other business units within Morgan Stanley may be limited and there can be no assurance that the investment adviser
will be able to source any investments from any one or more parts of the Morgan Stanley network.
The investment adviser may restrict its investment decisions and activities
on behalf of the Funds in various circumstances, including because of applicable regulatory requirements or information held by
the investment adviser or Morgan Stanley. The investment adviser might not engage in transactions or other activities for, or enforce
certain rights in favor of, a Fund due to Morgan Stanley’s activities outside the Funds. In instances where trading of an
investment is restricted, the investment adviser may not be able to purchase or sell such investment on behalf of a Fund, resulting
in the Fund’s inability to participate in certain desirable transactions. This inability to buy or sell an investment could
have an adverse effect on a Fund’s portfolio due to, among other things, changes in an investment’s value during the
period its trading is restricted. Also, in situations where the investment adviser is required to aggregate its positions with
those of other Morgan Stanley business units for position limit calculations, the investment adviser may have to refrain from making
investments due to the positions held by other Morgan Stanley business units or their clients. There may be other situations where
the investment adviser refrains from making an investment due to additional disclosure obligations, regulatory requirements, policies,
and reputational risk, or the investment adviser may limit purchases or sales of securities in respect of which Morgan Stanley
is engaged in an underwriting or other distribution capacity.
Morgan Stanley has established certain information barriers and other
policies to address the sharing of information between different businesses within Morgan Stanley. As a result of information barriers,
the investment adviser generally will not have access, or will have limited access, to certain information and personnel in other
areas of Morgan Stanley relating to business transactions for clients (including transactions in investing, banking, prime brokerage
and certain other areas), and generally will not manage the Funds with the benefit of the information held by such other areas.
Morgan Stanley, due to its access to and knowledge of funds, markets and securities based on its prime brokerage and other businesses,
may make decisions based on information or take (or refrain from taking) actions with respect to interests in investments of the
kind held (directly or indirectly) by the Funds in a manner that may be adverse to the Funds, and will not have any obligation
or other duty to share information with the investment adviser.
In limited circumstances, however, including for purposes of managing
business and reputational risk, and subject to policies and procedures, Morgan Stanley personnel, including personnel of the investment
adviser, on one side of an information barrier may have access to information and personnel on the other side of the information
barrier through “wall crossings.” The investment adviser faces conflicts of interest in determining whether to engage
in such wall crossings. Information obtained in connection with such wall crossings may limit or restrict the ability of the investment
adviser to engage in or otherwise effect transactions on behalf of the Funds (including purchasing or selling securities that the
investment adviser may otherwise have purchased or sold for a Fund in the absence of a wall crossing). In managing conflicts of
interest that arise because of the foregoing, the investment adviser generally will be subject to fiduciary requirements. The investment
adviser may also implement internal information barriers or ethical walls, and the conflicts described herein with respect to information
barriers and otherwise with respect to Morgan Stanley and the investment adviser will also apply internally within the investment
adviser. As a result, a Fund may not be permitted to transact in (e.g., dispose of a security in whole or in part) during periods
when it otherwise would have been able to do so, which could adversely affect a Fund. Other investors in the security that are
not subject to such restrictions may be able to transact in the security during such periods. There may also be circumstances in which, as a result of information held by certain
portfolio management teams in the investment adviser, the investment adviser limits an activity or transaction for a Fund, including
if the Fund is managed by a portfolio management team other than the team holding such information.
Investments by Morgan
Stanley and its Affiliated Investment Accounts. In serving in multiple capacities to Affiliated Investment Accounts, Morgan
Stanley, including the investment adviser and its investment teams, may have obligations to other clients or investors in Affiliated
Investment Accounts, the fulfillment of which may not be in the best interests of a Fund or its shareholders. A Fund’s investment
objectives may overlap with the investment objectives of certain Affiliated Investment Accounts. As a result, the members of an
investment team may face conflicts in the allocation of suitable investment opportunities among a Fund and other investment funds,
programs, accounts and businesses advised by or affiliated with the investment adviser. Certain Affiliated Investment Accounts
may provide for higher management or incentive fees or greater expense reimbursements or overhead allocations, all of which may
contribute to this conflict of interest and create an incentive for the investment adviser to favor such other accounts.
Morgan Stanley currently invests and plans to continue to invest on its
own behalf and on behalf of its Affiliated Investment Accounts in a wide variety of investment opportunities globally. Morgan Stanley
and its Affiliated Investment Accounts, to the extent consistent with applicable law and policies and procedures, will be permitted
to invest in investment opportunities without making such opportunities available to a Fund beforehand. Subject to the foregoing,
Morgan Stanley may offer investments that fall into the investment objectives of an Affiliated Investment Account to such account
or make such investment on its own behalf, even though such investment also falls within a Fund’s investment objectives.
A Fund may invest in opportunities that Morgan Stanley and/or one or more Affiliated Investment Accounts has declined, and vice
versa. All of the foregoing may reduce the number of investment opportunities available to a Fund and may create conflicts of interest
in allocating investment opportunities. Investors should note that the conflicts inherent in making such allocation decisions may
not always be resolved to a Fund’s advantage. There can be no assurance that a Fund will have an opportunity to participate
in certain opportunities that fall within their investment objectives.
To seek to reduce potential conflicts of interest and to attempt to allocate
such investment opportunities in a fair and equitable manner, the investment adviser has implemented allocation policies and procedures.
These policies and procedures are intended to give all clients of the investment adviser, including the Funds, fair access to investment
opportunities consistent with the requirements of organizational documents, investment strategies, applicable laws and regulations,
and the fiduciary duties of the investment adviser. Each client of the investment adviser that is subject to the allocation policies
and procedures, including each Fund, is assigned an investment team and portfolio manager(s) by the investment adviser. The investment
team and portfolio managers review investment opportunities and will decide with respect to the allocation of each opportunity
considering various factors and in accordance with the allocation policies and procedures. The allocation policies and procedures
are subject to change. Investors should note that the conflicts inherent in making such allocation decisions may not always be
resolved to the advantage of a Fund.
It is possible that Morgan Stanley or an Affiliated Investment Account,
including another Eaton Vance fund, will invest in or advise a company that is or becomes a competitor of a company of which a
Fund holds an investment. Such investment could create a conflict between the Fund, on the one hand, and Morgan Stanley or the
Affiliated Investment Account, on the other hand. In such a situation, Morgan Stanley may also have a conflict in the allocation
of its own resources to the portfolio investment. Furthermore, certain Affiliated Investment Accounts will be focused primarily
on investing in other funds which may have strategies that overlap and/or directly conflict and compete with a Fund.
In addition, certain investment professionals who are involved in a Fund’s
activities remain responsible for the investment activities of other Affiliated Investment Accounts managed by the investment adviser
and its affiliates, and they will devote time to the management of such investments and other newly created Affiliated Investment
Accounts (whether in the form of funds, separate accounts or other vehicles), as well as their own investments. In addition, in
connection with the management of investments for other Affiliated Investment Accounts, members of Morgan Stanley and its affiliates
may serve on the boards of directors of or advise companies which may compete with a Fund’s portfolio investments. Moreover,
these Affiliated Investment Accounts managed by Morgan Stanley and its affiliates may pursue investment opportunities that may
also be suitable for a Fund.
It should be noted that Morgan Stanley may, directly or indirectly, make
large investments in certain of its Affiliated Investment Accounts, and accordingly Morgan Stanley’s investment in a Fund
may not be a determining factor in the outcome of any of the foregoing conflicts. Nothing herein restricts or in any way limits
the activities of Morgan Stanley, including its ability to buy or sell interests in, or provide financing to, equity and/or debt
instruments, funds or portfolio companies, for its own accounts or for the accounts of Affiliated Investment Accounts or other
investment funds or clients in accordance with applicable law.
Different clients of the investment adviser, including a Fund, may invest
in different classes of securities of the same issuer, depending on the respective clients’ investment objectives and policies.
As a result, the investment adviser and its affiliates, at times, will seek to satisfy fiduciary obligations to certain clients
owning one class of securities of a particular issuer by pursuing or enforcing rights on behalf of those clients with respect to
such class of securities, and those activities may have an adverse effect on another client which owns a different class of securities
of such issuer. For example, if one client holds debt securities of an issuer and another client holds equity securities of the
same issuer, if the issuer experiences financial or operational challenges, the investment adviser and its affiliates may seek
a liquidation of the issuer on behalf of the client that holds the debt securities, whereas the client holding the equity securities
may benefit from a reorganization of the issuer. Thus, in such situations, the actions taken by the investment adviser or its affiliates
on behalf of one client can negatively impact securities held by another client. These conflicts also exist as between the investment
adviser’s clients, including the Funds, and the Affiliated Investment Accounts managed by Morgan Stanley.
The investment adviser and its affiliates may give advice and recommend
securities to other clients which may differ from advice given to, or securities recommended or bought for, a Fund even though
such other clients’ investment objectives may be similar to those of the Fund.
The investment adviser and its affiliates manage long and short portfolios.
The simultaneous management of long and short portfolios creates conflicts of interest in portfolio management and trading in that
opposite directional positions may be taken in client accounts managed by the same investment team, and creates risks such as:
(i) the risk that short sale activity could adversely affect the market value of long positions in one or more portfolios (and
vice versa) and (ii) the risks associated with the trading desk receiving opposing orders in the same security simultaneously.
The investment adviser and its affiliates have adopted policies and procedures that are reasonably designed to mitigate these conflicts.
In certain circumstances, the investment adviser invest on behalf of itself in securities and other instruments that would be appropriate
for, held by, or may fall within the investment guidelines of its clients, including a Fund. At times, the investment adviser will
give advice or take action for its own accounts that differs from, conflicts with, or is adverse to advice given or action taken
for any client.
From time to time, conflicts also arise due to the fact that certain securities
or instruments maybe held in some client accounts, including a Fund, but not in others, or the client accounts may have different
levels of holdings in certain securities or instruments, and because the accounts pay different levels of fees to the investment
adviser. In addition, at times an investment adviser investment team will give advice or take action with respect to the investments
of one or more clients that is not given or taken with respect to other clients with similar investment programs, objectives, and
strategies. Accordingly, clients with similar strategies will not always hold the same securities or instruments or achieve the
same performance. The investment adviser’s investment teams also advise clients with conflicting programs, objectives or
strategies. These conflicts also exist as between the investment adviser’s clients, including the Funds, and the Affiliated
Investment Accounts managed by Morgan Stanley.
The investment adviser maintains separate trading desks by investment
team and generally based on asset class, including two trading desks trading equity securities. These trading desks operate independently
of one another. The two equity trading desks do not share information. The separate equity trading desks may result in one desk
competing against the other desk when implementing buy and sell transactions, possibly causing certain accounts to pay more or
receive less for a security than other accounts. In addition, Morgan Stanley and its affiliates maintain separate trading desks
that operate independently of each other and do not share information with the investment adviser. The Morgan Stanley and affiliate
trading desks may compete against the investment adviser trading desks when implementing buy and sell transactions, possibly causing
certain Affiliated Investment Accounts to pay more or receive less for a security than other Affiliated Investment Accounts.
Payments to Broker-Dealers
and Other Financial Intermediaries. The investment adviser and/or EVD may pay compensation, out of their own funds and not
as an expense of the Funds, to certain financial intermediaries (which may include affiliates of the investment adviser and EVD),
including recordkeepers and administrators of various deferred compensation plans, in connection with the sale, distribution, marketing
and retention of shares of the Funds and/or shareholder servicing. For example, the investment adviser or EVD may pay additional
compensation to a financial intermediary for, among other things, promoting the sale and distribution of Fund shares, providing
access to various programs, mutual fund platforms or preferred or recommended mutual fund lists that may be offered by a financial
intermediary, granting EVD access to a financial intermediary’s financial advisors and consultants, providing assistance
in the ongoing education and training of a financial intermediary’s financial personnel, furnishing marketing support, maintaining
share balances and/or for sub-accounting, recordkeeping, administrative, shareholder or transaction processing services. Such payments
are in addition to any distribution fees, shareholder servicing fees and/or transfer agency fees that may be payable by the Funds.
The additional payments may be based on various factors, including level of sales (based on gross or net sales or some specified
minimum sales or some other similar criteria related to sales of the Funds and/or some or all other Eaton Vance funds), amount
of assets invested by the financial intermediary’s customers (which could include current or aged assets of the Funds and/or
some or all other Eaton Vance funds), a Fund’s advisory fee, some other agreed upon amount or other measures as determined from time to time by the investment adviser
and/or EVD. The amount of these payments may be different for different financial intermediaries.
The prospect of receiving, or the receipt of, additional compensation,
as described above, by financial intermediaries may provide such financial intermediaries and their financial advisors and other
salespersons with an incentive to favor sales of shares of the Funds over other investment options with respect to which these
financial intermediaries do not receive additional compensation (or receives lower levels of additional compensation). These payment
arrangements, however, will not change the price that an investor pays for shares of the Funds or the amount that the Funds receive
to invest on behalf of an investor. Investors may wish to take such payment arrangements into account when considering and evaluating
any recommendations relating to Fund shares and should review carefully any disclosures provided by financial intermediaries as
to their compensation.
Morgan Stanley Trading
and Principal Investing Activities. Notwithstanding anything to the contrary herein, Morgan Stanley will generally conduct
its sales and trading businesses, publish research and analysis, and render investment advice without regard for a Fund’s
holdings, although these activities could have an adverse impact on the value of one or more of the Fund’s investments, or
could cause Morgan Stanley to have an interest in one or more portfolio investments that is different from, and potentially adverse
to that of a Fund. Furthermore, from time to time, the investment adviser or its affiliates may invest “seed” capital
in a Fund, typically to enable the Fund to commence investment operations and/or achieve sufficient scale. The investment adviser
and its affiliates may hedge such seed capital exposure by investing in derivatives or other instruments expected to produce offsetting
exposure. Such hedging transactions, if any, would occur outside of a Fund.
Morgan Stanley’s sales and trading, financing and principal investing
businesses (whether or not specifically identified as such, and including Morgan Stanley’s trading and principal investing
businesses) will not be required to offer any investment opportunities to a Fund. These businesses may encompass, among other things,
principal trading activities as well as principal investing.
Morgan Stanley’s sales and trading, financing and principal investing
businesses have acquired or invested in, and in the future may acquire or invest in, minority and/or majority control positions
in equity or debt instruments of diverse public and/or private companies. Such activities may put Morgan Stanley in a position
to exercise contractual, voting or creditor rights, or management or other control with respect to securities or loans of portfolio
investments or other issuers, and in these instances Morgan Stanley may, in its discretion and subject to applicable law, act to
protect its own interests or interests of clients, and not a Fund’s interests.
Subject to the limitations of applicable law, a Fund may purchase from
or sell assets to, or make investments in, companies in which Morgan Stanley has or may acquire an interest, including as an owner,
creditor or counterparty.
Morgan Stanley’s
Investment Banking Activities. Morgan Stanley advises clients on a variety of mergers, acquisitions, restructuring, bankruptcy
and financing transactions. Morgan Stanley may act as an advisor to clients, including other investment funds that may compete
with a Fund and with respect to investments that a Fund may hold. Morgan Stanley may give advice and take action with respect to
any of its clients or proprietary accounts that may differ from the advice given, or may involve an action of a different timing
or nature than the action taken, by a Fund. Morgan Stanley may give advice and provide recommendations to persons competing with
a Fund and/or any of a Fund’s investments that are contrary to the Fund’s best interests and/or the best interests
of any of its investments.
Morgan Stanley could be engaged in financial advising, whether on the
buy-side or sell-side, or in financing or lending assignments that could result in Morgan Stanley’s determining in its discretion
or being required to act exclusively on behalf of one or more third parties, which could limit a Fund’s ability to transact
with respect to one or more existing or potential investments. Morgan Stanley may have relationships with third-party funds, companies
or investors who may have invested in or may look to invest in portfolio companies, and there could be conflicts between a Fund’s
best interests, on the one hand, and the interests of a Morgan Stanley client or counterparty, on the other hand.
To the extent that Morgan Stanley advises creditor or debtor companies
in the financial restructuring of companies either prior to or after filing for protection under Chapter 11 of the U.S. Bankruptcy
Code or similar laws in other jurisdictions, the investment adviser’s flexibility in making investments in such restructurings
on a Fund’s behalf may be limited. Morgan Stanley could provide investment banking services to competitors of portfolio companies,
as well as to private equity and/or private credit funds; such activities may present Morgan Stanley with a conflict of interest
vis-a-vis a Fund’s investment and may also result in a conflict in respect of the allocation of investment banking resources
to portfolio companies.
To the extent permitted by applicable law, Morgan Stanley may provide
a broad range of financial services to companies in which a Fund invests, including strategic and financial advisory services,
interim acquisition financing and other lending and underwriting or placement of securities, and Morgan Stanley generally will
be paid fees (that may include warrants or other securities) for such services. Morgan Stanley will not share any of the foregoing
interest, fees and other compensation received by it (including, for the avoidance of doubt, amounts received by the investment
adviser) with a Fund, and any advisory fees payable will not be reduced thereby.
Morgan Stanley may be engaged to act as a financial advisor to a company
in connection with the sale of such company, or subsidiaries or divisions thereof, may represent potential buyers of businesses
through its mergers and acquisition activities and may provide lending and other related financing services in connection with
such transactions. Morgan Stanley’s compensation for such activities is usually based upon realized consideration and is
usually contingent, in substantial part, upon the closing of the transaction. Under these circumstances, a Fund may be precluded
from participating in a transaction with or relating to the company being sold or participating in any financing activity related
to merger or acquisition.
To meet applicable regulatory requirements, there are periods when the
investment adviser will not engage in certain types of transactions in the securities of companies for which a broker-dealer affiliated
with Morgan Stanley is performing investment banking services. Fund shareholders will not receive notice of such instances. In
particular, when a broker-dealer affiliated with Morgan Stanley is engaged in an underwriting or other distribution of securities
of a company, the investment adviser may be prohibited from purchasing such securities on behalf of a Fund. In addition, under
certain circumstances, the investment adviser generally will not initiate transactions in the securities of companies with respect
to which affiliates of the investment adviser may have controlling interests or are affiliated.
The investment adviser believes that the nature and range of clients to
whom Morgan Stanley and its subsidiaries render investment banking and other services is such that it would be inadvisable to exclude
these companies from the Fund’s portfolio.
Morgan Stanley’s
Marketing Activities. Morgan Stanley is engaged in the business of underwriting, syndicating, brokering, administering,
servicing, arranging and advising on the distribution of a wide variety of securities and other investments in which a Fund may
invest. Subject to the restrictions of the 1940 Act, including Sections 10(f) and 17(e) thereof, a Fund may invest in transactions
in which Morgan Stanley acts as underwriter, placement agent, syndicator, broker, administrative agent, servicer, advisor, arranger
or structuring agent and receives fees or other compensation from the sponsors of such products or securities. Any fees earned
by Morgan Stanley in such capacity will not be shared with the investment adviser or the Funds. Certain conflicts of interest,
in addition to the receipt of fees or other compensation, would be inherent in these transactions. Moreover, the interests of one
of Morgan Stanley’s clients with respect to an issuer of securities in which a Fund has an investment may be adverse to the
investment adviser’s or a Fund’s best interests. In conducting the foregoing activities, Morgan Stanley will be acting
for its other clients and will have no obligation to act in the investment adviser’s or a Fund’s best interests.
Client Relationships.
Morgan Stanley has existing and potential relationships with a significant number of corporations, institutions and individuals.
In providing services to its clients, Morgan Stanley may face conflicts of interest with respect to activities recommended to or
performed for such clients, on the one hand, and a Fund, its shareholders or the entities in which the Fund invests, on the other
hand. In addition, these client relationships may present conflicts of interest in determining whether to offer certain investment
opportunities to a Fund.
In acting as principal or in providing advisory and other services to
its other clients, Morgan Stanley may engage in or recommend activities with respect to a particular matter that conflict with
or are different from activities engaged in or recommended by the investment adviser on a Fund’s behalf.
Principal Investments.
To the extent permitted by applicable law, there may be situations in which a Funds’ interests may conflict with the
interests of one or more general accounts of Morgan Stanley and its affiliates or accounts managed by Morgan Stanley or its affiliates.
This may occur because these accounts hold public and private debt and equity securities of many issuers which may be or become
portfolio companies, or from whom portfolio companies may be acquired.
Transactions with
Portfolio Companies of Affiliated Investment Accounts. The companies in which a Fund may invest may be counterparties to
or participants in agreements, transactions or other arrangements with portfolio companies or other entities of portfolio investments
of Affiliated Investment Accounts (for example, a company in which a Fund invests may retain a company in which an Affiliated Investment
Account invests to provide services or may acquire an asset from such company or vice versa). Certain of these agreements, transactions
and arrangements involve fees, servicing payments, rebates and/or other benefits to Morgan Stanley or its affiliates. For example,
portfolio entities may, including at the encouragement of Morgan Stanley, enter into agreements regarding group procurement and/or
vendor discounts. Morgan Stanley and its affiliates may also participate in these agreements and may realize better pricing or
discounts as a result of the participation of portfolio entities. To the extent permitted by applicable law, certain of these agreements
may provide for commissions or similar payments and/or discounts or rebates to be paid to a portfolio entity of an Affiliated Investment
Account, and such payments or discounts or rebates may also be made directly to Morgan Stanley or its affiliates. Under these arrangements,
a particular portfolio company or other entity may benefit to a greater degree than the other participants, and the funds, investment
vehicles and accounts (which may or may not include a Fund) that own an interest in such entity will receive a greater relative
benefit from the arrangements than the Eaton Vance funds, investment vehicles or accounts that do not own an interest therein.
Fees and compensation received by portfolio companies of Affiliated Investment Accounts in relation to the foregoing will not be shared with a Fund or offset advisory
fees payable.
Investments in Portfolio
Investments of Other Funds. To the extent permitted by applicable law, when a Fund invests in certain companies or other
entities, other funds affiliated with the investment adviser may have made or may be making an investment in such companies or
other entities. Other funds that have been or may be managed by the investment adviser may invest in the companies or other entities
in which a Fund has made an investment. Under such circumstances, a Fund and such other funds may have conflicts of interest (e.g.,
over the terms, exit strategies and related matters, including the exercise of remedies of their respective investments). If the
interests held by a Fund are different from (or take priority over) those held by such other funds, the investment adviser may
be required to make a selection at the time of conflicts between the interests held by such other funds and the interests held
by a Fund.
Allocation of Expenses.
Expenses may be incurred that are attributable to a Fund and one or more other Affiliated Investment Accounts (including in connection
with issuers in which a Fund and such other Affiliated Investment Accounts have overlapping investments). The allocation of such
expenses among such entities raises potential conflicts of interest. The investment adviser and its affiliates intend to allocate
such common expenses among a Fund and any such other Affiliated Investment Accounts on a pro rata basis or in such other manner
as the investment adviser deems to be fair and equitable or in such other manner as may be required by applicable law.
Temporary Investments.
To more efficiently invest short-term cash balances held by a Fund, the investment adviser may invest such balances on an
overnight “sweep” basis in shares of one or more money market funds or other short-term vehicles. It is anticipated
that the investment adviser to these money market funds or other short-term vehicles may be the investment adviser (or an affiliate)
to the extent permitted by applicable law, including Rule 12d1-1 under the 1940 Act. The Funds currently invests in Eaton Vance
Cash Reserves Fund, LLC (Cash Reserves Fund), an affiliated investment company managed by Eaton Vance, for this purpose. Eaton
Vance does not currently receive a fee for advisory services provided to Cash Reserves Fund.
Transactions with
Affiliates. The investment adviser and any investment sub-adviser might purchase securities from underwriters or placement
agents in which a Morgan Stanley affiliate is a member of a syndicate or selling group, as a result of which an affiliate might
benefit from the purchase through receipt of a fee or otherwise. Neither the investment adviser nor any investment sub-adviser
will purchase securities on behalf of a Fund from an affiliate that is acting as a manager of a syndicate or selling group. Purchases
by the investment adviser on behalf of a Fund from an affiliate acting as a placement agent must meet the requirements of applicable
law. Furthermore, Morgan Stanley may face conflicts of interest when the Funds use service providers affiliated with Morgan Stanley
because Morgan Stanley receives greater overall fees when they are used.
General Process for
Potential Conflicts. All of the transactions described above involve the potential for conflicts of interest between the
investment adviser, related persons of the investment adviser and/or their clients. The Advisers Act, the 1940 Act and ERISA impose
certain requirements designed to decrease the possibility of conflicts of interest between an investment adviser and its clients.
In some cases, transactions may be permitted subject to fulfillment of certain conditions. Certain other transactions may be prohibited.
In addition, the investment adviser has instituted policies and procedures designed to prevent conflicts of interest from arising
and, when they do arise, to ensure that it effects transactions for clients in a manner that is consistent with its fiduciary duty
to its clients and in accordance with applicable law. The investment adviser seeks to ensure that potential or actual conflicts
of interest are appropriately resolved taking into consideration the overriding best interests of the client.
EATON VANCE TAX-MANAGED GROWTH FUND 1.1
EATON VANCE TAX-MANAGED GROWTH FUND 1.2
Supplement to Prospectus
dated May 1, 2020
1. The following replaces “Management”
under “Fund Summaries – Eaton Vance Tax-Managed Growth Fund 1.1”:
Management
Investment
Adviser. Boston Management and Research (“BMR”) serves as investment adviser to the Portfolio. Effective March
1, 2021, Eaton Vance Management (“Eaton Vance”) serves as investment adviser to the Fund.
Portfolio Managers
Lewis
R. Piantedosi, Vice President of Eaton Vance and BMR, has managed the Portfolio since May 2006 and the Fund since March
1, 2021.
Michael
A. Allison, Vice President of Eaton Vance and BMR, has managed the Portfolio since March
2008 and the Fund since March 1, 2021.
Yana
S. Barton, Vice President of Eaton Vance and BMR, has managed the Portfolio since March 2008 and the Fund since March 1,
2021.
2. The following replaces “Management”
under “Fund Summaries – Eaton Vance Tax-Managed Growth Fund 1.2“:
Management
Investment
Adviser. Boston Management and Research (“BMR”) serves as investment adviser to the Portfolio. Effective March
1, 2021, Eaton Vance Management (“Eaton Vance”) serves as investment adviser to the Fund.
Portfolio Managers
Lewis
R. Piantedosi, Vice President of Eaton Vance and BMR, has managed the Portfolio since May 2006 and the Fund since March
1, 2021.
Michael
A. Allison, Vice President of Eaton Vance and BMR, has managed the Portfolio since March
2008 and the Fund since March 1, 2021.
Yana
S. Barton, Vice President of Eaton Vance and BMR, has managed the Portfolio since March 2008 and the Fund since March 1,
2021.
3. The following replaces “Management.”
under “Management and Organization”:
Each Fund’s investment adviser is Eaton Vance Management (“Eaton
Vance”) and the Portfolio’s investment adviser is Boston Management and Research (“BMR”). Each of Eaton
Vance and BMR have offices at Two International Place, Boston, MA 02110. Eaton Vance and BMR and their predecessor organizations
have been managing assets since 1924 and managing mutual funds since 1931. Prior to March 1, 2021, Eaton Vance was a wholly owned
subsidiary and BMR was an indirect wholly owned subsidiary of Eaton Vance Corp. (“EVC”).
On March 1, 2021, Morgan Stanley acquired EVC (the “Transaction”)
and Eaton Vance and BMR became indirect, wholly-owned subsidiaries of Morgan Stanley. In connection with the Transaction,
the Portfolio entered into a new investment advisory agreement with BMR. The agreement was approved by Portfolio interestholders
prior to the consummation of the Transaction and was effective upon its closing.
In addition, each Fund’s shareholders have approved a new investment
advisory agreement with Eaton Vance that took effect upon the closing of the Transaction. The new agreements for the Funds are
substantially similar to the new investment advisory agreement that was approved with respect to the Portfolio in connection with
the Transaction. Under each Fund’s new investment advisory agreement, Eaton Vance does not charge an advisory fee with respect
to Fund assets invested in the Portfolio or any other investment company for which Eaton Vance or its affiliates serve as investment
adviser and receive an advisory fee. Each Fund currently invests all of its assets in the Portfolio. In the event Eaton Vance manages
directly any assets of the Fund in the future, the applicable advisory fee rate payable by the Fund will be the same as that payable
by the Portfolio.
Morgan Stanley (NYSE: MS), whose principal offices are at 1585 Broadway,
New York, New York 10036, is a preeminent global financial services firm engaged in securities trading and brokerage activities,
as well as providing investment banking, research and analysis, financing and financial advisory services. As of December
31, 2020, after giving effect to the Transaction as described above, Morgan Stanley’s asset management operations had aggregate
assets under management of approximately $1.4 trillion.
Each Fund is allocated its pro rata share of the advisory fee paid by
the Portfolio. Effective March 1, 2021, any fee reduction agreement previously applicable to the Portfolio was incorporated into
its new investment advisory agreement with its investment adviser.
Each Fund’s annual shareholder report covering the fiscal period
ended December 31 provides information regarding the basis of the Trustees’ approval of each Fund’s and the Portfolio’s
investment advisory agreement.
Tax-Managed
Growth Fund 1.1 and 1.2. Under its investment advisory agreement with each Fund, Eaton Vance is entitled to receive an
advisory fee on average daily net assets per annum that are not invested in other investment companies for which Eaton Vance or
its affiliates (i) serves as adviser and (ii) receives an advisory fee. The fee is payable monthly.
Average Daily Net Assets for the Month
|
Annual Fee Rate
(for each level)
|
Up to $500 million
|
0.6250%
|
$500 million but less than $1 billion
|
0.5625%
|
$1 billion but less than $1.5 billion
|
0.5000%
|
$1.5 billion but less than $7 billion
|
0.4375%
|
$7 billion but less than $10 billion
|
0.4250%
|
$10 billion but less than $15 billion
|
0.4125%
|
$15 billion but less than $20 billion
|
0.4000%
|
$20 billion but less than $25 billion
|
0.3900%
|
$25 billion and over
|
0.3800%
|
Tax-Managed
Growth Portfolio. Under its investment advisory agreement with the Portfolio, BMR receives a monthly investment advisory
fee as follows:
Average Daily Net Assets for the Month
|
Annual Fee Rate*
(for each level)
|
Up to $500 million
|
0.6250%
|
$500 million but less than $1 billion
|
0.5625%
|
$1 billion but less than $1.5 billion
|
0.5000%
|
$1.5 billion but less than $7 billion
|
0.4375%
|
$7 billion but less than $10 billion
|
0.4250%
|
$10 billion but less than $15 billion
|
0.4125%
|
$15 billion but less than $20 billion
|
0.4000%
|
$20 billion but less than $25 billion
|
0.3900%
|
$25 billion and over
|
0.3800%
|
|
*
|
Prior to March 1, 2021, the Portfolio’s advisory fee was reduced pursuant to fee reduction agreements effective June
14, 2004 and April 23, 2007, respectively. Following the closing of the Transaction, as described above, this fee reduction was
incorporated into the Portfolio’s new investment advisory agreement with BMR.
|
For the fiscal year ended December 31, 2019, the effective annual rate
of investment advisory fee paid to BMR, based on average daily net assets of the Portfolio, was 0.43%.
Lewis R. Piantedosi, Michael A. Allison and Yana S. Barton act as co-portfolio
managers of the Portfolio. Mr. Piantedosi became co-portfolio manager of the Portfolio on May 1, 2006. Mr. Allison and Ms. Barton
became co-portfolio managers of the Portfolio on March 1, 2008. Each of Messrs. Piantedosi and Allison and Ms. Barton became co-portfolio
managers of each Fund on March 1, 2021. Messrs. Piantedosi and Allison and Ms. Barton are Vice Presidents of Eaton Vance and BMR.
Messrs. Piantedosi and Allison and Ms. Barton have been managing Eaton Vance portfolios for over five years.
The SAI provides additional information about each portfolio manager’s
compensation, other accounts managed by each portfolio manager, and each portfolio manager’s ownership of Fund shares.
Eaton Vance serves as the administrator of each Fund, providing each Fund
with administrative services and related office facilities. Under its administrative agreement with Tax-Managed Growth Fund 1.2,
Eaton Vance receives a monthly administrative fee equal to 0.15% annually of the average daily net assets of the Fund. For the
fiscal year ended December 31, 2019, Tax-Managed Growth Fund 1.2 paid administration fees to Eaton Vance of 0.15% of the Fund's
average daily net assets. Tax-Managed Growth Fund 1.1 pays no administration fee to Eaton Vance.
Eaton Vance provides sub-transfer agency and related services to Eaton
Vance mutual funds pursuant to a Sub-Transfer Agency Support Services Agreement. For its services under the agreement, Eaton Vance
receives an aggregate fee from such funds equal to its actual expenses incurred in performing such services.
4. The following replaces the
first paragraph under “Payments to Financial Intermediaries.” in “Purchasing Shares”:
Payments to Financial
Intermediaries. In addition to payments disclosed under “Sales Charges” below, the principal underwriter, out
of its own resources, may make cash payments to certain financial intermediaries (which may include affiliates of the principal
underwriter and investment adviser) who provide marketing support, transaction processing and/or administrative services and, in
some cases, include some or all Eaton Vance funds in preferred or specialized selling programs. Payments made by the principal
underwriter to a financial intermediary may be significant and are typically in the form of fees based on Fund sales, assets, transactions
processed and/or accounts attributable to that financial intermediary. Financial intermediaries also may receive amounts from the
principal underwriter in connection with educational or due diligence meetings that include information concerning Eaton Vance
funds. The principal underwriter may pay or allow other promotional incentives or payments to financial intermediaries to the extent
permitted by applicable laws and regulations.
5. The following replaces “Fund
Purchases through Edward D. Jones & Co., L.P. (“Edward Jones”)” under “Appendix A – Financial
Intermediary Sales Charge Variations”:
Policies Regarding Transactions Through Edward
D. Jones & Co., L.P. (“Edward Jones”)
The following information has been provided by Edward Jones:
Effective on or after March 1, 2021, the following information supersedes
prior information with respect to transactions and positions held in fund shares through an Edward Jones system. Clients of Edward
Jones (also referred to as “shareholders”) purchasing fund shares on the Edward Jones commission and fee-based platforms
are eligible only for the following sales charge discounts (also referred to as “breakpoints”) and waivers, which can
differ from discounts and waivers described elsewhere in the mutual fund prospectus or statement of additional information (“SAI”)
or through another broker-dealer. In all instances, it is the shareholder's responsibility to inform Edward Jones at the time of
purchase of any relationship, holdings of fund family or other facts qualifying the purchaser for discounts or waivers. Edward
Jones can ask for documentation from the shareholder of such circumstance. Shareholders should contact Edward Jones if they have
questions regarding their eligibility for these discounts and waivers.
Breakpoints
|
·
|
Breakpoint pricing, otherwise known as volume pricing, at dollar thresholds as described in the prospectus.
|
Rights of Accumulation (“ROA”)
|
·
|
The applicable sales charge on a purchase of Class A shares is determined by taking into account all share classes (except
certain money market funds and any assets held in group retirement plans) of the mutual fund family held by the shareholder or
in an account grouped by Edward Jones with other accounts for the purpose of providing certain pricing considerations (“pricing
groups”). If grouping assets as a shareholder, this includes all share classes held on the Edward Jones platform and/or held
on another platform. The inclusion of eligible fund family assets in the ROA calculation is dependent on the shareholder notifying
Edward Jones of such assets at the time of calculation. Money market funds are included only if such shares were sold with a sales
charge at the time of purchase or acquired in exchange for shares purchased with a sales charge.
|
|
·
|
The employer maintaining a SEP IRA plan and/or SIMPLE IRA plan may elect to establish or change ROA for the IRA accounts associated
with the plan to a plan-level grouping as opposed to including all share classes at a shareholder or pricing group level.
|
|
·
|
ROA is determined by calculating the higher of cost minus redemptions or market value (current shares x NAV).
|
Letter of Intent (“LOI”)
|
·
|
Through a LOI, shareholders can receive the sales charge and breakpoint discounts for purchases shareholders intend to make
over a 13-month period from the date Edward Jones receives the LOI. The LOI is determined by calculating the higher of cost or
market value of qualifying holdings at LOI initiation in combination with the value that the shareholder intends to buy over a
13-month period to calculate the front-end sales charge and any breakpoint discounts. Each purchase the shareholder makes during
that 13-month period will receive the sales charge and breakpoint discount that applies to the total amount. If during the 13-month
period the shareholder redeems any of the shares purchased pursuant to a LOI, the value of the redeemed shares will not be included
for purposes of satisfying the LOI. The inclusion of eligible fund family assets in the LOI calculation is dependent on the shareholder
notifying Edward Jones of such assets at the time of calculation. Purchases made before the LOI is received by Edward Jones are
not adjusted under the LOI and will not reduce the sales charge previously paid. Sales charges will be adjusted if LOI is not met.
|
|
·
|
If the employer maintaining a SEP IRA plan and/or SIMPLE IRA plan has elected to establish or change ROA for the IRA accounts associated with the plan to a plan-level grouping,
LOIs will also be at the plan-level and may only be established by the employer.
|
Front-end Sales Charge Waivers
Sales charges are waived for the following shareholders and
in the following situations:
|
·
|
Associates of Edward Jones and its affiliates and their family members who are in the same pricing group (as determined by
Edward Jones under its policies and procedures) as the associate. This waiver will continue for the remainder of the associate's
life if the associate retires from Edward Jones in good-standing and remains in good standing pursuant to Edward Jones' policies
and procedures.
|
|
·
|
Shares purchased in an Edward Jones fee-based program.
|
|
·
|
Shares purchased through reinvestment of capital gains distributions and dividend reinvestment.
|
|
·
|
Shares purchased from the proceeds of redeemed shares of the same fund family so long as the following conditions are met:
1) the proceeds are from the sale of shares within 60 days of the purchase, and 2) the sale and purchase are made in the same share
class and the same account or the purchase is made in an individual retirement account with proceeds from liquidations in a non-retirement
account.
|
|
·
|
Shares exchanged into Class A shares from another share class so long as the exchange is into the same fund and was initiated
at the discretion of Edward Jones. Edward Jones is responsible for any remaining Contingent Deferred Sales Charge (“CDSC”)
due to the fund company or its affiliate, if applicable. Any future purchases are subject to the applicable sales charge as disclosed
in the prospectus.
|
|
·
|
Exchanges from Class C shares to Class A shares of the same fund, generally, in the 84th month following the anniversary of
the purchase date or earlier at the discretion of Edward Jones.
|
CDSC Waivers
If the shareholder purchases shares that are subject to a CDSC
and those shares are redeemed before the CDSC is expired, the shareholder is responsible to pay the CDSC except in the following
conditions:
|
·
|
The death or disability of the shareholder.
|
|
·
|
Systematic withdrawals with up to 10% per year of the account value.
|
|
·
|
Return of excess contributions from an Individual Retirement Account (IRA).
|
|
·
|
Shares sold as part of a required minimum distribution for IRA and retirement accounts if the redemption is taken in or after
the year the shareholder reaches qualified age based on applicable IRS regulations.
|
|
·
|
Shares sold to pay Edward Jones fees or costs in such cases where the transaction is initiated by Edward Jones. Edward Jones
is responsible for any remaining CDSC due to the fund company or its affiliate, if applicable.
|
|
·
|
Shares exchanged in an Edward Jones fee-based program. Edward Jones is responsible for any remaining CDSC due to the fund company
or its affiliate, if applicable.
|
|
·
|
Shares acquired through NAV reinstatement.
|
|
·
|
Shares redeemed at the discretion of Edward Jones for Minimum Balances as described below.
|
******************************************************************************
Other Important Information Regarding Transactions Through Edward Jones
Minimum Purchase Amounts
|
·
|
Initial purchase minimum: $250
|
|
·
|
Subsequent purchase minimum: none
|
Minimum Balances
|
·
|
Edward Jones has the right to redeem at its discretion fund holdings with a balance of $250 or less. The following are examples
of accounts that are not included in this policy:
|
|
·
|
A fee-based account held on an Edward Jones platform
|
|
·
|
A 529 account held on an Edward Jones platform
|
|
·
|
An account with an active systematic investment plan or LOI
|
Exchanging Share Classes
At any time it deems necessary, Edward Jones has the authority to exchange
at NAV a shareholder's holdings in a fund to Class A shares of the same fund. Edward Jones is responsible for any remaining CDSC
due to the fund company or its affiliate, if applicable. Any future purchases are subject to the applicable sales charge as disclosed
in the prospectus.
March 1, 2021
|
37962 3.1.21
|
EATON VANCE TAX-MANAGED GROWTH FUND 1.1
EATON VANCE TAX-MANAGED GROWTH FUND 1.2
Supplement to Statement
of Additional Information dated May 1, 2020
1. The following replaces the
first paragraph under “Fund Management.” in “Management and Organization”:
Fund Management.
The Trustees of the Trust are responsible for the overall management and supervision of the affairs
of the Trust. The Trustees of the Portfolio are responsible for the overall management and supervision of the Portfolio. The Board
members and officers of the Trust and the Portfolio are listed below. Except as indicated, each individual has held the office
shown or other offices in the same company for the last five years. Board members hold indefinite terms of office. Each Trustee
holds office until his or her successor is elected and qualified, subject to a prior death, resignation, retirement, disqualification
or removal. Under the terms of each Fund’s and the Portfolio’s current Trustee retirement policy, an Independent
Trustee must retire and resign as a Trustee on the earlier of: (i) the first day of July following his or her 74th birthday; or
(ii), with limited exception, December 31st of the 20th year in which he or she has served as a Trustee. However, if such retirement
and resignation would cause each Fund or the Portfolio to be out of compliance with Section 16 of the 1940 Act or any other
regulations or guidance of the SEC, then such retirement and resignation will not become effective until such time as action has
been taken for each Fund or the Portfolio to be in compliance therewith. The “noninterested Trustees” consist
of those Trustees who are not “interested persons” of the Trust and the Portfolio, as that term is defined under the
1940 Act. The business address of each Board member and officer is Two International Place, Boston, Massachusetts 02110. As used
in this SAI, “EVC” refers to Eaton Vance Corp., “EV” refers to Eaton Vance, Inc., “Eaton Vance”
refers to Eaton Vance Management and “EVD” refers to Eaton Vance Distributors, Inc. (see “Principal Underwriter”
under “Other Service Providers”). EV is the trustee of each of Eaton Vance and BMR. Effective March 1, 2021, each of
Eaton Vance, BMR, EVD and EV are indirect wholly-owned subsidiaries of Morgan Stanley. Each officer affiliated with Eaton Vance
may hold a position with other Eaton Vance affiliates that is comparable to his or her position with Eaton Vance listed below.
2. The following replaces the
Thomas E. Faust Jr. row in the Trustees table and in his biographical narrative in “Management and Organization”:
THOMAS E. FAUST JR.
1958
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Trustee
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Since 2007
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Chairman of Morgan Stanley Investment Management, Inc. (MSIM), Director and President of EV, Chief Executive Officer and President of Eaton Vance and BMR, and Director of EVD. Formerly, Chairman, Chief Executive Officer and President of EVC. Trustee and/or officer of 141 registered investment companies. Mr. Faust is an interested person because of his positions with MSIM, BMR, Eaton Vance, EVD and EV, which are affiliates of the Trust and the Portfolio, and his former position with EVC, which was an affiliate of the Trust and the Portfolio prior to March 1, 2021.
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141
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Formerly, Director of EVC (2007-2021) and Hexavest Inc. (2012-2021) (investment management firm).
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Thomas E. Faust
Jr. Mr. Faust has served as a member of the Eaton Vance Fund Boards since 2007. Effective March 1, 2021, he is Chairman
of MSIM. He is also Director and President of EV, Chief Executive Officer and President of Eaton Vance and BMR, and Director of
EVD. Mr. Faust previously served as Chairman and Chief Executive Officer of EVC from 2007 through March 1, 2021 and as President
of EVC from 2006 through March 1, 2021. Mr. Faust served as a Director of Hexavest Inc. from 2012-2021. From 2016 through 2019,
Mr. Faust served as a Director of SigFig Wealth Management LLC. Mr. Faust previously served as an equity analyst, portfolio manager,
Director of Equity Research and Management and Chief Investment Officer of Eaton Vance from 1985-2007. He holds B.S. degrees in
Mechanical Engineering and Economics from the Massachusetts Institute of Technology and an MBA from Harvard Business School. Mr.
Faust has been a Chartered Financial Analyst since 1988. He is a trustee and member of the executive committee of the Boston Symphony
Orchestra, Inc. and trustee emeritus of Wellesley College.
3. The following replaces the
first and second paragraphs under “Investment Advisory Services.” in “Investment Advisory and Administrative
Services”:
Investment Advisory
Services. As described in the Prospectus, upon the closing of the transaction by which Morgan Stanley acquired EVC (the
“Transaction”), each Fund entered into a new investment advisory agreement with Eaton Vance and the Portfolio entered
into a new investment advisory agreement with BMR. Each investment adviser manages the investments and affairs of the Portfolio
and each Fund and provides related office facilities and personnel subject to the supervision of the Trust's Board, in the case
of a Fund, or a Portfolio’s Board. Each investment adviser furnishes investment research, advice and supervision, furnishes
an investment program and determines what securities will be purchased, held or sold by the Portfolio and each Fund and what portion,
if any, of the Portfolio’s, and each Fund’s assets will be held uninvested. Each Investment Advisory Agreement requires
the investment adviser, to pay the compensation and expenses of all officers and Trustees who are members of the investment adviser's
organization and all personnel of the investment adviser performing services relating to research and investment activities.
As described in the Prospectus, Eaton Vance serves as investment adviser
for each Fund effective March 1, 2021. For a description of the compensation that each Fund pays Eaton Vance, see the Prospectus.
BMR serves as the investment adviser to the Portfolio. For a description of the compensation that the Portfolio pays the investment
adviser, see the Prospectus.
4. The following replaces the
last paragraph under “Investment Advisory Services.” in “Investment Advisory and Administrative Services”:
Each Investment Advisory Agreement with the investment adviser continues
in effect through and including the second anniversary of its execution and shall continue in full force and effect indefinitely
thereafter, but only so long as such continuance after such second anniversary is specifically approved at least annually (i) by
the vote of a majority of the noninterested Trustees of the Trust, in the case of each Fund, or the Portfolio, in the case of the
Portfolio, cast in person at a meeting specifically called for the purpose of voting on such approval and (ii) by the Board of
the Trust, in the case of each Fund, or the Portfolio, in the case of the Portfolio, or by vote of a majority of the outstanding
voting securities of the Portfolio or Fund. Each Agreement may be terminated at any time without penalty on sixty (60) days’
written notice by either party, or by vote of the majority of the outstanding voting securities of the Portfolio or Fund, and each
Agreement will terminate automatically in the event of its assignment. Each Agreement provides that the investment adviser
may render services to others. Each Agreement also provides that the investment adviser shall not be liable for any loss incurred
in connection with the performance of its duties, or action taken or omitted under the Agreement, in the absence of willful misfeasance,
bad faith, gross negligence or reckless disregard of its obligations and duties thereunder, or for any losses sustained in the
acquisition, holding or disposition of any security or other investment. Each Agreement is not intended to, and does not, confer
upon any person not a party to it any right, benefit or remedy of any nature.
5. The following replaces “Information
About BMR and Eaton Vance.” in “Investment Advisory and Administrative Services”:
Information About
BMR and Eaton Vance. BMR and Eaton Vance are business trusts organized under the laws of the Commonwealth of Massachusetts.
EV serves as trustee of BMR and Eaton Vance. As described in the Prospectus, following the closing of the Transaction on March
1, 2021, EV, Eaton Vance and BMR became indirect wholly-owned subsidiaries of Morgan Stanley (NYSE: MS), a preeminent global financial
services firm engaged in securities trading and brokerage activities, as well as providing investment banking, research and analysis,
financing and financial advisory services.
Prior to March 1, 2021, EV and Eaton Vance were wholly-owned subsidiaries
of EVC, a Maryland corporation and publicly-held holding company and BMR was an indirect wholly owned subsidiary of EVC. EVC through
its subsidiaries and affiliates engaged primarily in investment management, administration and marketing activities. The Directors
of EVC were Thomas E. Faust Jr., Ann E. Berman, Leo I. Higdon, Jr., Paula A. Johnson, Brian D. Langstraat, Dorothy E. Puhy, Winthrop
H. Smith, Jr. and Richard A. Spillane, Jr. All shares of the outstanding Voting Common Stock of EVC were deposited in a Voting
Trust, the Voting Trustees of which were Mr. Faust, Paul W. Bouchey, Craig R. Brandon, Daniel C. Cataldo, Michael A. Cirami, Cynthia
J. Clemson, James H. Evans, Maureen A. Gemma, Laurie G. Hylton, Mr. Langstraat, Thomas Lee, Frederick S. Marius, David C. McCabe,
Edward J. Perkin, Lewis R. Piantedosi, Charles B. Reed, Craig P. Russ, Thomas C. Seto, John L. Shea, Eric A. Stein, John H. Streur,
Andrew N. Sveen, Payson F. Swaffield, R. Kelly Williams and Matthew J. Witkos (all of whom are or were officers of Eaton Vance
or its affiliates). The Voting Trustees had unrestricted voting rights for the election of Directors of EVC. Prior to March 1,
2021, all of the outstanding voting trust receipts issued under said Voting Trust were owned by certain of the officers of BMR
and Eaton Vance who may also have been officers, or officers and Directors of EVC and EV. As indicated under “Management
and Organization,” all of the officers of the Trust (as well as Mr. Faust who is also a Trustee) are employees of Eaton Vance
and/or BMR.
6. The following replaces “Compensation
Structure for BMR.” and “Method to Determine Compensation.” under “Portfolio Managers.” in “Investment
Advisory and Administrative Services”:
Compensation Structure
for Eaton Vance and BMR. Compensation of the investment adviser's portfolio managers and other investment professionals
has the following primary components: (1) a base salary, (2) an annual cash bonus, and (3) annual non-cash compensation consisting
of restricted shares of Morgan Stanley stock that are subject to a fixed vesting and distribution schedule. The investment adviser’s
investment professionals also receive certain retirement, insurance and other benefits that are broadly available to the investment
adviser’s employees. Compensation of the investment adviser’s investment professionals is reviewed primarily on an
annual basis. Cash bonuses, stock-based compensation awards, and adjustments in base salary are typically paid or put into effect
at or shortly after the December 31st fiscal year end of Morgan Stanley.
Method to Determine
Compensation. The investment adviser compensates its portfolio managers based primarily on the scale and complexity
of their portfolio responsibilities and the total return performance of managed funds and accounts versus the benchmark(s) stated
in the prospectus, as well as an appropriate peer group (as described below). In addition to rankings within peer groups of funds
on the basis of absolute performance, consideration may also be given to relative risk-adjusted performance. Risk-adjusted performance
measures include, but are not limited to, the Sharpe ratio, which uses standard deviation and excess return to determine reward
per unit of risk. Performance is normally based on periods ending on the September 30th preceding fiscal year end. Fund performance
is normally evaluated primarily versus peer groups of funds as determined by Lipper Inc. and/or Morningstar, Inc. When a fund’s
peer group as determined by Lipper or Morningstar is deemed by the investment adviser’s management not to provide a fair
comparison, performance may instead be evaluated primarily against a custom peer group or market index. In evaluating the performance
of a fund and its manager, primary emphasis is normally placed on three-year performance, with secondary consideration of performance
over longer and shorter periods. For funds that are tax-managed or otherwise
have an objective of after-tax returns, performance is measured net of taxes.
For other funds, performance is evaluated on a pre-tax basis. For funds with an investment objective other than total return (such
as current income), consideration will also be given to the fund’s success in achieving its objective. For managers responsible
for multiple funds and accounts, investment performance is evaluated on an aggregate basis, based on averages or weighted averages
among managed funds and accounts. Funds and accounts that have performance-based advisory fees are not accorded disproportionate
weightings in measuring aggregate portfolio manager performance.
The compensation of portfolio managers with other job responsibilities (such
as heading an investment group or providing analytical support to other portfolios) will include consideration of the scope of
such responsibilities and the managers’ performance in meeting them.
The investment adviser seeks to compensate portfolio managers commensurate
with their responsibilities and performance, and competitive with other firms within the investment management industry. The investment
adviser participates in investment-industry compensation surveys and utilizes survey data as a factor in determining salary, bonus
and stock-based compensation levels for portfolio managers and other investment professionals. Salaries, bonuses and stock-based
compensation are also influenced by the operating performance of the investment adviser and Morgan Stanley. The overall annual
cash bonus pool is generally based on a substantially fixed percentage of pre-bonus adjusted operating income. While the salaries
of the investment adviser’s portfolio managers are comparatively fixed, cash bonuses and stock-based compensation may fluctuate
significantly from year to year, based on changes in manager performance and other factors as described herein. For a high performing
portfolio manager, cash bonuses and stock-based compensation may represent a substantial portion of total compensation.
7. The following replaces the
first two paragraphs in “Other Service Providers”:
Principal Underwriter.
Eaton Vance Distributors, Inc. (“EVD”), Two International Place, Boston, MA 02110 is
the principal underwriter of each Fund. The principal underwriter acts as principal in selling shares under a Distribution Agreement
with the Trust. The expenses of printing copies of prospectuses used to offer shares and other selling literature and of advertising
are borne by the principal underwriter. The fees and expenses of qualifying and registering and maintaining qualifications and
registrations of a Fund and its shares under federal and state securities laws are borne by the Fund. The Distribution Agreement
is renewable annually by the members of the Board (including a majority of the noninterested Trustees who have no direct or indirect
financial interest in the operation of the Distribution Agreement or any applicable Distribution Plan), may be terminated on sixty
days’ notice either by such Trustees or by vote of a majority of the outstanding Fund shares or on six months’ notice
by the principal underwriter and is automatically terminated upon assignment. The principal underwriter distributes shares on a
“best efforts” basis under which it is required to take and pay for only such shares as may be sold. Effective March
1, 2021, EVD is an indirect wholly-owned subsidiary of Morgan Stanley. Prior to March 1, 2021, EVD was a direct, wholly-owned subsidiary
of EVC. Mr. Faust is also a Director of EVD. EVD also serves as placement agent for the Portfolio, if applicable.
Custodian.
State Street Bank and Trust Company (“State Street”), State Street Financial Center,
One Lincoln Street, Boston, MA 02111, serves as custodian to each Fund and the Portfolio, if applicable. State Street has custody
of all cash and securities representing a Fund’s interest in the Portfolio, has custody of the Portfolio’s and
each Fund's assets, maintains the general ledger of the Portfolio and each Fund and computes the daily net asset value of interests
in the Portfolio and the net asset value of shares of each Fund. In such capacity it attends to details in connection with the
sale, exchange, substitution, transfer or other dealings with each Fund's and the Portfolio’s investments, receives and disburses
all funds and performs various other ministerial duties upon receipt of proper instructions from the Trust and the Portfolio. State
Street also provides services in connection with the preparation of shareholder reports and the electronic filing of such reports
with the SEC.
8. The following replaces the
first, second, fourth, sixth and seventh paragraphs in “Portfolio Securities Transactions”:
Decisions concerning the execution of portfolio security transactions,
including the selection of the market and the broker-dealer firm or other financial intermediary (each an “intermediary”),
are made by the investment adviser. Each Fund and each Portfolio is responsible for the expenses associated with its portfolio
transactions. The investment adviser is also responsible for the execution of transactions for all other accounts managed by it.
The investment adviser places the portfolio security transactions for execution with one or more intermediaries firms. The investment
adviser uses its best efforts to obtain execution of portfolio security transactions at prices that, in the investment adviser’s
judgment, are advantageous to the client and at a reasonably competitive spread or (when a disclosed commission is being charged)
at reasonably competitive commission rates. In seeking such execution, the investment adviser will use its best judgment in evaluating
the terms of a transaction, and will give consideration to various relevant factors, which may include, without limitation, the
full range and quality of the intermediary’s services, responsiveness of the intermediary to the investment adviser, the
size and type of the transaction, the nature and character of the market for the security, the confidentiality, speed and certainty
of effective execution required for the transaction, the general execution and operational capabilities of the intermediary, the
reputation, reliability, experience and financial condition of the intermediary, the value and quality of the services rendered
by the intermediary in this and other transactions, and the amount of the spread or commission, if any. In addition, the investment
adviser may consider the receipt of Research Services (as defined below), provided it does not compromise the investment adviser’s
obligation to seek best overall execution for a Fund or Portfolio and is otherwise in compliance with applicable law. The investment
adviser may engage in portfolio transactions with an intermediary that sells shares of Eaton Vance funds, provided such transactions
are not directed to that intermediary as compensation for the promotion or sale of such shares.
As described in the Prospectus, following the closing of the Transaction
on March 1, 2021, the investment adviser became an “affiliated person,” as defined in the 1940 Act, of Morgan Stanley
and its affiliates, including certain intermediaries (as previously defined). As a result, the investment adviser is subject to
certain restrictions regarding transactions with Morgan Stanley-affiliated intermediaries, as set forth in the 1940 Act. Under
certain circumstances, such restrictions may limit the investment adviser’sability to place portfolio transactions on behalf
of a Fund or Portfolio at the desired time or price. Any transaction the investment adviser enters into with a Morgan Stanley-affiliated
intermediary on behalf of a Fund or Portfolio will be done in compliance with applicable laws, rules, and regulations; will be
subject to any restrictions contained in a Fund’s or Portfolio’s investment advisory agreement; will be subject to
the investment adviser’s duty to seek best execution; and, will comply with any applicable policies and procedures of the
investment adviser, as described below.
Subject to the overriding objective of obtaining the best execution of
orders and applicable rules and regulations, as described above, a Fund or Portfolio may use an affiliated intermediary, including
a Morgan Stanley-affiliated intermediary, to effect Fund or Portfolio portfolio transactions, including transactions in futures
contracts and options on futures contracts, under procedures adopted by the Board. In order to use such affiliated intermediaries,
the Fund’s or Portfolio’s Board must approve and periodically review procedures reasonably designed to ensure that
commission rates and other remuneration paid to the affiliated intermediaries are fair and reasonable in comparison to those of
other intermediaries for comparable transactions involving similar securities being purchased or sold during a comparable time
period.
Pursuant to an order issued by the SEC, a Fund or Portfolio is permitted
to engage in principal transactions in money market instruments, subject to certain conditions, with Morgan Stanley & Co. LLC,
a broker-dealer affiliated with Morgan Stanley.
Transactions on stock exchanges and other agency transactions involve the
payment of negotiated brokerage commissions. Such commissions vary among different broker-dealer firms, and a particular broker-dealer
may charge different commissions according to such factors as the difficulty and size of the transaction and the volume of business
done with such broker-dealer. Transactions in foreign securities often involve the payment of brokerage commissions, which may
be higher than those in the United States. There is generally no stated commission in the case of securities traded in the over-the-counter
markets including transactions in fixed-income securities which are generally purchased and sold on a net basis (i.e., without
commission) through intermediaries and banks acting for their own account rather than as brokers. Such intermediaries attempt to
profit from such transactions by buying at the bid price and selling at the higher asked price of the market for such obligations,
and the difference between the bid and asked price is customarily referred to as the spread. Fixed-income transactions may also
be transacted directly with the issuer of the obligations. In an underwritten offering the price paid often includes a disclosed
fixed commission or discount retained by the underwriter or dealer. Although spreads or commissions paid on portfolio security
transactions will, in the judgment of the investment adviser, be reasonable in relation to the value of the services provided,
commissions exceeding those which another firm might charge may be paid to intermediaries who were selected to execute transactions
on behalf of the investment adviser’s clients in part for providing brokerage and research services to the investment adviser
as permitted by applicable law.
Research Services provided by (and produced by) broker-dealers that execute
portfolio transactions or from affiliates of executing broker-dealers are referred to as “Proprietary Research.” Except
for trades executed in jurisdictions where such consideration is not permissible, the investment adviser may and does consider
the receipt of Proprietary Research Services as a factor in selecting broker dealers to execute client portfolio transactions,
provided it does not compromise the investment adviser’s obligation to seek best overall execution. In jurisdictions where
permissible, the investment adviser also may consider the receipt of Research Services under so called “client commission
arrangements” or “commission sharing arrangements” (both referred to as “CCAs”) as a factor in selecting
broker dealers to execute transactions, provided it does not compromise the investment adviser’s obligation to seek best
overall execution. Under a CCA arrangement, the investment adviser may cause client accounts to effect transactions through a broker-dealer
and request that the broker-dealer allocate a portion of the commissions paid on those transactions to a pool of commission credits
that are paid to other firms that provide Research Services to the investment adviser. Under a CCA, the broker-dealer that provides
the Research Services need not execute the trade. Participating in CCAs may enable the investment adviser to consolidate payments
for research using accumulated client commission credits from transactions executed through a particular broker-dealer to periodically
pay for Research Services obtained from and provided by other firms, including other broker-dealers that supply Research Services.
The investment adviser believes that CCAs offer the potential to optimize the execution of trades and the acquisition of a variety
of high quality Research Services that the investment adviser might not be provided access to absent CCAs. The investment adviser
may enter into CCA arrangements with a number of broker-dealers and other firms, including certain affiliates of the investment
adviser. The investment adviser will only enter into and utilize CCAs to the extent permitted by Section 28(e) and other applicable
law.
The investment companies sponsored by the investment adviser or certain
of its affiliates also may allocate brokerage commissions to acquire information relating to the
performance, fees and expenses of such companies and other investment companies, which information is used by the members
of the Board of such companies to fulfill their responsibility to oversee the quality of the services provided to various entities,
including the investment adviser, to such companies. Such companies may also pay cash for such information.
Securities considered as investments for each Fund and the Portfolio, if
applicable, may also be appropriate for other investment accounts managed by the investment adviser or certain of its affiliates.
Whenever decisions are made to buy or sell securities by each Fund or the Portfolio and one or more of such other accounts simultaneously,
the investment adviser will allocate the security transactions (including “new” issues) in a manner which it believes
to be equitable under the circumstances. As a result of such allocations, there may be instances where each Fund or the Portfolio
will not participate in a transaction that is allocated among other accounts. If an aggregated order cannot be filled completely,
allocations will generally be made on a pro rata basis. An order may not be allocated on a pro rata basis where, for example: (i)
consideration is given to portfolio managers who have been instrumental in developing or negotiating a particular investment; (ii)
consideration is given to an account with specialized investment policies that coincide with the particulars of a specific investment;
(iii) pro rata allocation would result in odd-lot or de minimis amounts being allocated to a portfolio or
other client; or (iv) where the investment adviser reasonably determines that departure from a pro rata allocation is advisable.
While these aggregation and allocation policies could have a detrimental effect on the price or amount of the securities available
to each Fund or the Portfolio from time to time, it is the opinion of the members of the Board that the benefits from the investment
adviser organization outweigh any disadvantage that may arise from exposure to simultaneous transactions.
9. The following is added as
a new section immediately prior to “Financial Statements”:
POTENTIAL CONFLICTS OF INTEREST
As a diversified global financial services firm, Morgan Stanley engages
in a broad spectrum of activities, including financial advisory services, investment management activities, lending, commercial
banking, sponsoring and managing private investment funds, engaging in broker-dealer transactions and principal securities, commodities
and foreign exchange transactions, research publication and other activities. In the ordinary course of its business, Morgan Stanley
is a full-service investment banking and financial services firm and therefore engages in activities where Morgan Stanley’s
interests or the interests of its clients may conflict with the interests of a Fund or Portfolio, if applicable, (collectively
for the purposes of this section, “Fund” or “Funds”). Morgan Stanley advises clients and sponsors, manages
or advises other investment funds and investment programs, accounts and businesses (collectively, together with the Funds, any
new or successor funds, programs, accounts or businesses, the ‘‘Affiliated Investment Accounts’’) with
a wide variety of investment objectives that in some instances may overlap or conflict with a Fund’s investment objectives
and present conflicts of interest. In addition, Morgan Stanley may also from time to time create new or successor Affiliated Investment
Accounts that may compete with a Fund and present similar conflicts of interest. The discussion below enumerates certain actual,
apparent and potential conflicts of interest. There is no assurance that conflicts of interest will be resolved in favor of Fund
shareholders and, in fact, they may not be. Conflicts of interest not described below may also exist.
Material Non-public
and Other Information. It is expected that confidential or material non-public information regarding an investment or potential
investment opportunity may become available to the investment adviser. If such information becomes available, the investment adviser
may be precluded (including by applicable law or internal policies or procedures) from pursuing an investment or disposition opportunity
with respect to such investment or investment opportunity.
The investment adviser may also from time to time be subject to contractual
‘‘stand-still’’ obligations and/or confidentiality obligations that may restrict its ability to trade in
certain investments on a Fund’s behalf. In addition, the investment adviser may be precluded from disclosing such information
to an investment team, even in circumstances in which the information would be beneficial if disclosed. Therefore, the investment
team may not be provided access to material non-public information in the possession of Morgan Stanley that might be relevant to
an investment decision to be made on behalf of a Fund, and the investment team may initiate a transaction or sell an investment
that, if such information had been known to it, may not have been undertaken. In addition, certain members of the investment team
may be recused from certain investment-related discussions so that such members do not receive information that would limit their
ability to perform functions of their employment with the investment adviser or its affiliates unrelated to that of a Fund. Furthermore,
access to certain parts of Morgan Stanley may be subject to third party confidentiality obligations and to information barriers
established by Morgan Stanley in order to manage potential conflicts of interest and regulatory restrictions, including without
limitation joint transaction restrictions pursuant to the 1940 Act. Accordingly, the investment adviser’s ability to source
investments from other business units within Morgan Stanley may be limited and there can be no assurance that the investment adviser
will be able to source any investments from any one or more parts of the Morgan Stanley network.
The investment adviser may restrict its investment decisions and activities
on behalf of the Funds in various circumstances, including because of applicable regulatory requirements or information held by
the investment adviser or Morgan Stanley. The investment adviser might not engage in transactions or other activities for, or enforce
certain rights in favor of, a Fund due to Morgan Stanley’s activities outside the Funds. In instances where trading of an
investment is restricted, the investment adviser may not be able to purchase or sell such investment on behalf of a Fund, resulting
in the Fund’s inability to participate in certain desirable transactions. This inability to buy or sell an investment could
have an adverse effect on a Fund’s portfolio due to, among other things, changes in an investment’s value during the
period its trading is restricted. Also, in situations where the investment adviser is required to aggregate its positions with
those of other Morgan Stanley business units for position limit calculations, the investment adviser may have to refrain from making
investments due to the positions held by other Morgan Stanley business units or their clients. There may be other situations where
the investment adviser refrains from making an investment due to additional disclosure obligations, regulatory requirements, policies,
and reputational risk, or the investment adviser may limit purchases or sales of securities in respect of which Morgan Stanley
is engaged in an underwriting or other distribution capacity.
Morgan Stanley has established certain information barriers and other
policies to address the sharing of information between different businesses within Morgan Stanley. As a result of information barriers,
the investment adviser generally will not have access, or will have limited access, to certain information and personnel in other
areas of Morgan Stanley relating to business transactions for clients (including transactions in investing, banking, prime brokerage
and certain other areas), and generally will not manage the Funds with the benefit of the information held by such other areas.
Morgan Stanley, due to its access to and knowledge of funds, markets and securities based on its prime brokerage and other businesses,
may make decisions based on information or take (or refrain from taking) actions with respect to interests in investments of the
kind held (directly or indirectly) by the Funds in a manner that may be adverse to the Funds, and will not have any obligation
or other duty to share information with the investment adviser.
In limited circumstances, however, including for purposes of managing
business and reputational risk, and subject to policies and procedures, Morgan Stanley personnel, including personnel of the investment
adviser, on one side of an information barrier may have access to information and personnel on the other side of the information
barrier through “wall crossings.” The investment adviser faces conflicts of interest in determining whether to engage
in such wall crossings. Information obtained in connection with such wall crossings may limit or restrict the ability of the investment
adviser to engage in or otherwise effect transactions on behalf of the Funds (including purchasing or selling securities that the
investment adviser may otherwise have purchased or sold for a Fund in the absence of a wall crossing). In managing conflicts of
interest that arise because of the foregoing, the investment adviser generally will be subject to fiduciary requirements. The investment
adviser may also implement internal information barriers or ethical walls, and the conflicts described herein with respect to information
barriers and otherwise with respect to Morgan Stanley and the investment adviser will also apply internally within the investment
adviser. As a result, a Fund may not be permitted to transact in (e.g., dispose of a security in whole or in part) during periods
when it otherwise would have been able to do so, which could adversely affect a Fund. Other investors in the security that are
not subject to such restrictions may be able to transact in the security during such periods. There may also be circumstances in
which, as a result of information held by certain portfolio management teams in the investment adviser, the investment adviser
limits an activity or transaction for a Fund, including if the Fund is managed by a portfolio management team other than the team
holding such information.
Investments by Morgan
Stanley and its Affiliated Investment Accounts. In serving in multiple capacities to Affiliated Investment Accounts, Morgan
Stanley, including the investment adviser and its investment teams, may have obligations to other clients or investors in Affiliated
Investment Accounts, the fulfillment of which may not be in the best interests of a Fund or its shareholders. A Fund’s investment
objectives may overlap with the investment objectives of certain Affiliated Investment Accounts. As a result, the members of an
investment team may face conflicts in the allocation of suitable investment opportunities among a Fund and other investment funds,
programs, accounts and businesses advised by or affiliated with the investment adviser. Certain Affiliated Investment Accounts
may provide for higher management or incentive fees or greater expense reimbursements or overhead allocations, all of which may
contribute to this conflict of interest and create an incentive for the investment adviser to favor such other accounts.
Morgan Stanley currently invests and plans to continue to invest on its
own behalf and on behalf of its Affiliated Investment Accounts in a wide variety of investment opportunities globally. Morgan Stanley
and its Affiliated Investment Accounts, to the extent consistent with applicable law and policies and procedures, will be permitted
to invest in investment opportunities without making such opportunities available to a Fund beforehand. Subject to the foregoing,
Morgan Stanley may offer investments that fall into the investment objectives of an Affiliated Investment Account to such account
or make such investment on its own behalf, even though such investment also falls within a Fund’s investment objectives.
A Fund may invest in opportunities that Morgan Stanley and/or one or more Affiliated Investment Accounts has declined, and vice
versa. All of the foregoing may reduce the number of investment opportunities available to a Fund and may create conflicts of interest
in allocating investment opportunities. Investors should note that the conflicts inherent in making such allocation decisions may
not always be resolved to a Fund’s advantage. There can be no assurance that a Fund will have an opportunity to participate
in certain opportunities that fall within their investment objectives.
To seek to reduce potential conflicts of interest and to attempt to allocate
such investment opportunities in a fair and equitable manner, the investment adviser has implemented allocation policies and procedures.
These policies and procedures are intended to give all clients of the investment adviser, including the Funds, fair access to investment
opportunities consistent with the requirements of organizational documents, investment strategies, applicable laws and regulations,
and the fiduciary duties of the investment adviser. Each client of the investment adviser that is subject to the allocation policies
and procedures, including each Fund, is assigned an investment team and portfolio manager(s) by the investment adviser. The investment
team and portfolio managers review investment opportunities and will decide with respect to the allocation of each opportunity
considering various factors and in accordance with the allocation policies and procedures. The allocation policies and procedures
are subject to change. Investors should note that the conflicts inherent in making such allocation decisions may not always be
resolved to the advantage of a Fund.
It is possible that Morgan Stanley or an Affiliated Investment Account,
including another Eaton Vance fund, will invest in or advise a company that is or becomes a competitor of a company of which a
Fund holds an investment. Such investment could create a conflict between the Fund, on the one hand, and Morgan Stanley or the
Affiliated Investment Account, on the other hand. In such a situation, Morgan Stanley may also have a conflict in the allocation
of its own resources to the portfolio investment. Furthermore, certain Affiliated Investment Accounts will be focused primarily
on investing in other funds which may have strategies that overlap and/or directly conflict and compete with a Fund.
In addition, certain investment professionals who are involved in a Fund’s
activities remain responsible for the investment activities of other Affiliated Investment Accounts managed by the investment adviser
and its affiliates, and they will devote time to the management of such investments and other newly created Affiliated Investment
Accounts (whether in the form of funds, separate accounts or other vehicles), as well as their own investments. In addition, in
connection with the management of investments for other Affiliated Investment Accounts, members of Morgan Stanley and its affiliates
may serve on the boards of directors of or advise companies which may compete with a Fund’s portfolio investments. Moreover,
these Affiliated Investment Accounts managed by Morgan Stanley and its affiliates may pursue investment opportunities that may
also be suitable for a Fund.
It should be noted that Morgan Stanley may, directly or indirectly, make
large investments in certain of its Affiliated Investment Accounts, and accordingly Morgan Stanley’s investment in a Fund
may not be a determining factor in the outcome of any of the foregoing conflicts. Nothing herein restricts or in any way limits
the activities of Morgan Stanley, including its ability to buy or sell interests in, or provide financing to, equity and/or debt
instruments, funds or portfolio companies, for its own accounts or for the accounts of Affiliated Investment Accounts or other
investment funds or clients in accordance with applicable law.
Different clients of the investment adviser, including a Fund, may invest
in different classes of securities of the same issuer, depending on the respective clients’ investment objectives and policies.
As a result, the investment adviser and its affiliates, at times, will seek to satisfy fiduciary obligations to certain clients
owning one class of securities of a particular issuer by pursuing or enforcing rights on behalf of those clients with respect to
such class of securities, and those activities may have an adverse effect on another client which owns a different class of securities
of such issuer. For example, if one client holds debt securities of an issuer and another client holds equity securities of the
same issuer, if the issuer experiences financial or operational challenges, the investment adviser and its affiliates may seek
a liquidation of the issuer on behalf of the client that holds the debt securities, whereas the client holding the equity securities
may benefit from a reorganization of the issuer. Thus, in such situations, the actions taken by the investment adviser or its affiliates
on behalf of one client can negatively impact securities held by another client. These conflicts also exist as between the investment
adviser’s clients, including the Funds, and the Affiliated Investment Accounts managed by Morgan Stanley.
The investment adviser and its affiliates may give advice and recommend
securities to other clients which may differ from advice given to, or securities recommended or bought for, a Fund even though
such other clients’ investment objectives may be similar to those of the Fund.
The investment adviser and its affiliates manage long and short portfolios.
The simultaneous management of long and short portfolios creates conflicts of interest in portfolio management and trading in that
opposite directional positions may be taken in client accounts managed by the same investment team, and creates risks such as:
(i) the risk that short sale activity could adversely affect the market value of long positions in one or more portfolios (and
vice versa) and (ii) the risks associated with the trading desk receiving opposing orders in the same security simultaneously.
The investment adviser and its affiliates have adopted policies and procedures that are reasonably designed to mitigate these conflicts.
In certain circumstances, the investment adviser invest on behalf of itself in securities and other instruments that would be appropriate
for, held by, or may fall within the investment guidelines of its clients, including a Fund. At times, the investment adviser will
give advice or take action for its own accounts that differs from, conflicts with, or is adverse to advice given or action taken
for any client.
From time to time, conflicts also arise due to the fact that certain securities
or instruments maybe held in some client accounts, including a Fund, but not in others, or the client accounts may have different
levels of holdings in certain securities or instruments, and because the accounts pay different levels of fees to the investment
adviser. In addition, at times an investment adviser investment team will give advice or take action with respect to the investments
of one or more clients that is not given or taken with respect to other clients with similar investment programs, objectives, and
strategies. Accordingly, clients with similar strategies will not always hold the same securities or instruments or achieve the
same performance. The investment adviser’s investment teams also advise clients with conflicting programs, objectives or
strategies. These conflicts also exist as between the investment adviser’s clients, including the Funds, and the Affiliated
Investment Accounts managed by Morgan Stanley.
The investment adviser maintains separate trading desks by investment
team and generally based on asset class, including two trading desks trading equity securities. These trading desks operate independently
of one another. The two equity trading desks do not share information. The separate equity trading desks may result in one desk
competing against the other desk when implementing buy and sell transactions, possibly causing certain accounts to pay more or
receive less for a security than other accounts. In addition, Morgan Stanley and its affiliates maintain separate trading desks
that operate independently of each other and do not share information with the investment adviser. The Morgan Stanley and affiliate
trading desks may compete against the investment adviser trading desks when implementing buy and sell transactions, possibly causing
certain Affiliated Investment Accounts to pay more or receive less for a security than other Affiliated Investment Accounts.
Payments to Broker-Dealers
and Other Financial Intermediaries. The investment adviser and/or EVD may pay compensation, out of their own funds and not
as an expense of the Funds, to certain financial intermediaries (which may include affiliates of the investment adviser and EVD),
including recordkeepers and administrators of various deferred compensation plans, in connection with the sale, distribution, marketing
and retention of shares of the Funds and/or shareholder servicing. For example, the investment adviser or EVD may pay additional
compensation to a financial intermediary for, among other things, promoting the sale and distribution of Fund shares, providing
access to various programs, mutual fund platforms or preferred or recommended mutual fund lists that may be offered by a financial
intermediary, granting EVD access to a financial intermediary’s financial advisors and consultants, providing assistance
in the ongoing education and training of a financial intermediary’s financial personnel, furnishing marketing support, maintaining
share balances and/or for sub-accounting, recordkeeping, administrative, shareholder or transaction processing services. Such payments
are in addition to any distribution fees, shareholder servicing fees and/or transfer agency fees that may be payable by the Funds.
The additional payments may be based on various factors, including level of sales (based on gross or net sales or some specified
minimum sales or some other similar criteria related to sales of the Funds and/or some or all other Eaton Vance funds), amount
of assets invested by the financial intermediary’s customers (which could include current or aged assets of the Funds and/or
some or all other Eaton Vance funds), a Fund’s advisory fee, some other agreed upon amount or other measures as determined
from time to time by the investment adviser and/or EVD. The amount of these payments may be different for different financial intermediaries.
The prospect of receiving, or the receipt of, additional compensation,
as described above, by financial intermediaries may provide such financial intermediaries and their financial advisors and other
salespersons with an incentive to favor sales of shares of the Funds over other investment options with respect to which these
financial intermediaries do not receive additional compensation (or receives lower levels of additional compensation). These payment
arrangements, however, will not change the price that an investor pays for shares of the Funds or the amount that the Funds receive
to invest on behalf of an investor. Investors may wish to take such payment arrangements into account when considering and evaluating
any recommendations relating to Fund shares and should review carefully any disclosures provided by financial intermediaries as
to their compensation.
Morgan Stanley Trading
and Principal Investing Activities. Notwithstanding anything to the contrary herein, Morgan Stanley will generally conduct
its sales and trading businesses, publish research and analysis, and render investment advice without regard for a Fund’s
holdings, although these activities could have an adverse impact on the value of one or more of the Fund’s investments, or
could cause Morgan Stanley to have an interest in one or more portfolio investments that is different from, and potentially adverse
to that of a Fund. Furthermore, from time to time, the investment adviser or its affiliates may invest “seed” capital
in a Fund, typically to enable the Fund to commence investment operations and/or achieve sufficient scale. The investment adviser
and its affiliates may hedge such seed capital exposure by investing in derivatives or other instruments expected to produce offsetting
exposure. Such hedging transactions, if any, would occur outside of a Fund.
Morgan Stanley’s sales and trading, financing and principal investing
businesses (whether or not specifically identified as such, and including Morgan Stanley’s trading and principal investing
businesses) will not be required to offer any investment opportunities to a Fund. These businesses may encompass, among other things,
principal trading activities as well as principal investing.
Morgan Stanley’s sales and trading, financing and principal investing
businesses have acquired or invested in, and in the future may acquire or invest in, minority and/or majority control positions
in equity or debt instruments of diverse public and/or private companies. Such activities may put Morgan Stanley in a position
to exercise contractual, voting or creditor rights, or management or other control with respect to securities or loans of portfolio
investments or other issuers, and in these instances Morgan Stanley may, in its discretion and subject to applicable law, act to
protect its own interests or interests of clients, and not a Fund’s interests.
Subject to the limitations of applicable law, a Fund may purchase from
or sell assets to, or make investments in, companies in which Morgan Stanley has or may acquire an interest, including as an owner,
creditor or counterparty.
Morgan Stanley’s
Investment Banking Activities. Morgan Stanley advises clients on a variety of mergers, acquisitions, restructuring, bankruptcy
and financing transactions. Morgan Stanley may act as an advisor to clients, including other investment funds that may compete
with a Fund and with respect to investments that a Fund may hold. Morgan Stanley may give advice and take action with respect to
any of its clients or proprietary accounts that may differ from the advice given, or may involve an action of a different timing
or nature than the action taken, by a Fund. Morgan Stanley may give advice and provide recommendations to persons competing with
a Fund and/or any of a Fund’s investments that are contrary to the Fund’s best interests and/or the best interests
of any of its investments.
Morgan Stanley could be engaged in financial advising, whether on the
buy-side or sell-side, or in financing or lending assignments that could result in Morgan Stanley’s determining in its discretion
or being required to act exclusively on behalf of one or more third parties, which could limit a Fund’s ability to transact
with respect to one or more existing or potential investments. Morgan Stanley may have relationships with third-party funds, companies
or investors who may have invested in or may look to invest in portfolio companies, and there could be conflicts between a Fund’s
best interests, on the one hand, and the interests of a Morgan Stanley client or counterparty, on the other hand.
To the extent that Morgan Stanley advises creditor or debtor companies
in the financial restructuring of companies either prior to or after filing for protection under Chapter 11 of the U.S. Bankruptcy
Code or similar laws in other jurisdictions, the investment adviser’s flexibility in making investments in such restructurings
on a Fund’s behalf may be limited. Morgan Stanley could provide investment banking services to competitors of portfolio companies,
as well as to private equity and/or private credit funds; such activities may present Morgan Stanley with a conflict of interest
vis-a-vis a Fund’s investment and may also result in a conflict in respect of the allocation of investment banking resources
to portfolio companies.
To the extent permitted by applicable law, Morgan Stanley may provide
a broad range of financial services to companies in which a Fund invests, including strategic and financial advisory services,
interim acquisition financing and other lending and underwriting or placement of securities, and Morgan Stanley generally will
be paid fees (that may include warrants or other securities) for such services. Morgan Stanley will not share any of the foregoing
interest, fees and other compensation received by it (including, for the avoidance of doubt, amounts received by the investment
adviser) with a Fund, and any advisory fees payable will not be reduced thereby.
Morgan Stanley may be engaged to act as a financial advisor to a company
in connection with the sale of such company, or subsidiaries or divisions thereof, may represent potential buyers of businesses
through its mergers and acquisition activities and may provide lending and other related financing services in connection with
such transactions. Morgan Stanley’s compensation for such activities is usually based upon realized consideration and is
usually contingent, in substantial part, upon the closing of the transaction. Under these circumstances, a Fund may be precluded
from participating in a transaction with or relating to the company being sold or participating in any financing activity related
to merger or acquisition.
To meet applicable regulatory requirements, there are periods when the
investment adviser will not engage in certain types of transactions in the securities of companies for which a broker-dealer affiliated
with Morgan Stanley is performing investment banking services. Fund shareholders will not receive notice of such instances. In
particular, when a broker-dealer affiliated with Morgan Stanley is engaged in an underwriting or other distribution of securities
of a company, the investment adviser may be prohibited from purchasing such securities on behalf of a Fund. In addition, under
certain circumstances, the investment adviser generally will not initiate transactions in the securities of companies with respect
to which affiliates of the investment adviser may have controlling interests or are affiliated.
The investment adviser believes that the nature and range of clients to
whom Morgan Stanley and its subsidiaries render investment banking and other services is such that it would be inadvisable to exclude
these companies from the Fund’s portfolio.
Morgan Stanley’s
Marketing Activities. Morgan Stanley is engaged in the business of underwriting, syndicating, brokering, administering,
servicing, arranging and advising on the distribution of a wide variety of securities and other investments in which a Fund may
invest. Subject to the restrictions of the 1940 Act, including Sections 10(f) and 17(e) thereof, a Fund may invest in transactions
in which Morgan Stanley acts as underwriter, placement agent, syndicator, broker, administrative agent, servicer, advisor, arranger
or structuring agent and receives fees or other compensation from the sponsors of such products or securities. Any fees earned
by Morgan Stanley in such capacity will not be shared with the investment adviser or the Funds. Certain conflicts of interest,
in addition to the receipt of fees or other compensation, would be inherent in these transactions. Moreover, the interests of one
of Morgan Stanley’s clients with respect to an issuer of securities in which a Fund has an investment may be adverse to the
investment adviser’s or a Fund’s best interests. In conducting the foregoing activities, Morgan Stanley will be acting
for its other clients and will have no obligation to act in the investment adviser’s or a Fund’s best interests.
Client Relationships.
Morgan Stanley has existing and potential relationships with a significant number of corporations, institutions and individuals.
In providing services to its clients, Morgan Stanley may face conflicts of interest with respect to activities recommended to or
performed for such clients, on the one hand, and a Fund, its shareholders or the entities in which the Fund invests, on the other
hand. In addition, these client relationships may present conflicts of interest in determining whether to offer certain investment
opportunities to a Fund.
In acting as principal or in providing advisory and other services to
its other clients, Morgan Stanley may engage in or recommend activities with respect to a particular matter that conflict with
or are different from activities engaged in or recommended by the investment adviser on a Fund’s behalf.
Principal Investments.
To the extent permitted by applicable law, there may be situations in which a Funds’ interests may conflict with the
interests of one or more general accounts of Morgan Stanley and its affiliates or accounts managed by Morgan Stanley or its affiliates.
This may occur because these accounts hold public and private debt and equity securities of many issuers which may be or become
portfolio companies, or from whom portfolio companies may be acquired.
Transactions with
Portfolio Companies of Affiliated Investment Accounts. The companies in which a Fund may invest may be counterparties to
or participants in agreements, transactions or other arrangements with portfolio companies or other entities of portfolio investments
of Affiliated Investment Accounts (for example, a company in which a Fund invests may retain a company in which an Affiliated Investment
Account invests to provide services or may acquire an asset from such company or vice versa). Certain of these agreements, transactions
and arrangements involve fees, servicing payments, rebates and/or other benefits to Morgan Stanley or its affiliates. For example,
portfolio entities may, including at the encouragement of Morgan Stanley, enter into agreements regarding group procurement and/or
vendor discounts. Morgan Stanley and its affiliates may also participate in these agreements and may realize better pricing or
discounts as a result of the participation of portfolio entities. To the extent permitted by applicable law, certain of these agreements
may provide for commissions or similar payments and/or discounts or rebates to be paid to a portfolio entity of an Affiliated Investment
Account, and such payments or discounts or rebates may also be made directly to Morgan Stanley or its affiliates. Under these arrangements,
a particular portfolio company or other entity may benefit to a greater degree than the other participants, and the funds, investment
vehicles and accounts (which may or may not include a Fund) that own an interest in such entity will receive a greater relative
benefit from the arrangements than the Eaton Vance funds, investment vehicles or accounts that do not own an interest therein.
Fees and compensation received by portfolio companies of Affiliated Investment Accounts in relation to the foregoing will not be
shared with a Fund or offset advisory fees payable.
Investments in Portfolio
Investments of Other Funds. To the extent permitted by applicable law, when a Fund invests in certain companies or other
entities, other funds affiliated with the investment adviser may have made or may be making an investment in such companies or
other entities. Other funds that have been or may be managed by the investment adviser may invest in the companies or other entities
in which a Fund has made an investment. Under such circumstances, a Fund and such other funds may have conflicts of interest (e.g.,
over the terms, exit strategies and related matters, including the exercise of remedies of their respective investments). If the
interests held by a Fund are different from (or take priority over) those held by such other funds, the investment adviser may
be required to make a selection at the time of conflicts between the interests held by such other funds and the interests held
by a Fund.
Allocation of Expenses.
Expenses may be incurred that are attributable to a Fund and one or more other Affiliated Investment Accounts (including in connection
with issuers in which a Fund and such other Affiliated Investment Accounts have overlapping investments). The allocation of such
expenses among such entities raises potential conflicts of interest. The investment adviser and its affiliates intend to allocate
such common expenses among a Fund and any such other Affiliated Investment Accounts on a pro rata basis or in such other manner
as the investment adviser deems to be fair and equitable or in such other manner as may be required by applicable law.
Temporary Investments.
To more efficiently invest short-term cash balances held by a Fund, the investment adviser may invest such balances on an
overnight “sweep” basis in shares of one or more money market funds or other short-term vehicles. It is anticipated
that the investment adviser to these money market funds or other short-term vehicles may be the investment adviser (or an affiliate)
to the extent permitted by applicable law, including Rule 12d1-1 under the 1940 Act. The Funds currently invests in Eaton Vance
Cash Reserves Fund, LLC (Cash Reserves Fund), an affiliated investment company managed by Eaton Vance, for this purpose. Eaton
Vancedoes not currently receive a fee for advisory services provided to Cash Reserves Fund.
Transactions with
Affiliates. The investment adviser and any investment sub-adviser might purchase securities from underwriters or placement
agents in which a Morgan Stanley affiliate is a member of a syndicate or selling group, as a result of which an affiliate might
benefit from the purchase through receipt of a fee or otherwise. Neither the investment adviser nor any investment sub-adviser
will purchase securities on behalf of a Fund from an affiliate that is acting as a manager of a syndicate or selling group. Purchases
by the investment adviser on behalf of a Fund from an affiliate acting as a placement agent must meet the requirements of applicable
law. Furthermore, Morgan Stanley may face conflicts of interest when the Funds use service providers affiliated with Morgan Stanley
because Morgan Stanley receives greater overall fees when they are used.
General Process for
Potential Conflicts. All of the transactions described above involve the potential for conflicts of interest between the
investment adviser, related persons of the investment adviser and/or their clients. The Advisers Act, the 1940 Act and ERISA impose
certain requirements designed to decrease the possibility of conflicts of interest between an investment adviser and its clients.
In some cases, transactions may be permitted subject to fulfillment of certain conditions. Certain other transactions may be prohibited.
In addition, the investment adviser has instituted policies and procedures designed to prevent conflicts of interest from arising
and, when they do arise, to ensure that it effects transactions for clients in a manner that is consistent with its fiduciary duty
to its clients and in accordance with applicable law. The investment adviser seeks to ensure that potential or actual conflicts
of interest are appropriately resolved taking into consideration the overriding best interests of the client.
EATON VANCE CORE BOND FUND
Supplement to Prospectus
dated May 1, 2020
1. The following replaces “Management”
under “Fund Summary”:
Management
Investment
Adviser. Boston Management and Research (“BMR”) serves as investment adviser to the Portfolio. Effective March
1, 2021, Eaton Vance Management (“Eaton Vance”) serves as investment adviser to the Fund.
Portfolio Managers
Vishal
Khanduja, CFA, Vice President of Eaton Vance and BMR, has managed the Portfolio since June 2017 and the Fund since March
1, 2021.
Brian
S. Ellis, CFA, Vice President of Eaton Vance and BMR, has managed the Portfolio since June 2017 and the Fund since March
1, 2021.
2. The following replaces “Management.”
under “Management and Organization”:
Management.
The Fund’s investment adviser is Eaton Vance Management (“Eaton Vance”) and the Portfolio’s investment
adviser is Boston Management and Research (“BMR”). Each of Eaton Vance and BMR have offices at Two International Place,
Boston, MA 02110. Eaton Vance and BMR and their predecessor organizations have been managing assets since 1924 and managing
mutual funds since 1931. Prior to March 1, 2021, Eaton Vance was a wholly owned subsidiary and BMR was an indirect wholly owned
subsidiary of Eaton Vance Corp. (“EVC”).
On March 1, 2021, Morgan Stanley acquired EVC (the “Transaction”)
and Eaton Vance and BMR became indirect, wholly-owned subsidiaries of Morgan Stanley. In connection with the Transaction,
the Portfolio entered into a new investment advisory agreement with BMR. The agreement was approved by Portfolio interestholders
prior to the consummation of the Transaction and was effective upon its closing.
In addition, Fund shareholders have approved a new investment advisory
agreement with Eaton Vance that took effect upon the closing of the Transaction. The new agreement for the Fund is substantially
similar to the new investment advisory agreement that was approved with respect to the Portfolio in connection with the Transaction.
Under the Fund’s new investment advisory agreement, Eaton Vance does not charge an advisory fee with respect to Fund assets
invested in the Portfolio or any other investment company for which Eaton Vance or its affiliates serve as investment adviser and
receive an advisory fee. The Fund currently invests all of its assets in the Portfolio. In the event Eaton Vance manages directly
any assets of the Fund in the future, the applicable advisory fee rate payable by the Fund will be the same as that payable by
the Portfolio.
Morgan Stanley (NYSE: MS), whose principal offices are at
1585 Broadway Avenue, New York, New York 10036, is a preeminent global financial services firm engaged in securities trading
and brokerage activities, as well as providing investment banking, research and analysis, financing and financial advisory
services. As of December 31, 2020, after giving effect to the Transaction as described above, Morgan Stanley’s asset management
operations had aggregate assets under management of approximately $1.4 trillion.
The Fund is allocated its pro rata share of the advisory fee paid by the
Portfolio in which it invests. Effective March 1, 2021, any fee reduction agreement previously applicable to the Portfolio was
incorporated into its new investment advisory agreement with its investment adviser.
The Fund’s semiannual report covering the fiscal period ended June
30 will provide information regarding the basis for the Trustees’ approval of the Fund’s and the Portfolio’s
investment advisory agreements.
Core
Bond Fund. Under its investment advisory agreement with the Fund, Eaton Vance is entitled to receive an advisory fee on
average daily net assets per annum that are not invested in other investment companies for which Eaton Vance or its affiliates
(i) serves as adviser and (ii) receives an advisory fee. The fee is payable monthly.
Average Daily Net Assets for the Month
|
Annual Fee Rate
(for each level)
|
Up to $1 billion
|
0.450%
|
$1 billion up to $2 billion
|
0.425%
|
$2 billion up to $5 billion
|
0.415%
|
$5 billion and over
|
0.405%
|
Core
Bond Portfolio. Under its investment advisory agreement with the Portfolio, BMR receives an advisory fee based on average
daily net assets. The fee is payable monthly.
Average Daily Net Assets for the Month
|
Annual Fee Rate
(for each level)*
|
Up to $1 billion
|
0.450%
|
$1 billion up to $2 billion
|
0.425%
|
$2 billion up to $5 billion
|
0.415%
|
$5 billion and over
|
0.405%
|
|
*
|
Prior to March 1, 2021, the Portfolio’s advisory fee was reduced pursuant to a fee reduction agreement effective October
15, 2007. Following the closing of the Transaction, as described above, this fee reduction agreement was incorporated into the
Portfolio’s new investment advisory agreement with BMR.
|
For the fiscal year ended December 31, 2019, the effective annual rate
of advisory fee paid to BMR, based on average daily net assets of the Portfolio, was 0.45%.
Vishal Khanduja and Brian S. Ellis have served as portfolio managers of
the Portfolio since June 2017 and of the Fund since March 1, 2021. Mr. Khanduja is a Vice President of Eaton Vance and BMR. Prior
to joining the Eaton Vance organization on December 31, 2016, he was a Portfolio Manager and Head of Taxable Fixed Income at Calvert
Investment Management, Inc. (“CIM”) since July 2012. Mr. Ellis is a Vice President of Eaton Vance and BMR. Prior to
joining the Eaton Vance organization on December 31, 2016, he was Portfolio Manager and a member of the Taxable Fixed Income Team
at CIM since May 2012.
The SAI provides additional information about each portfolio manager’s
compensation, other accounts managed by each portfolio manager, and each portfolio manager’s ownership of Fund shares.
Eaton Vance serves as the administrator of the Fund, providing the Fund
with administrative services and related office facilities. Eaton Vance does not currently receive a fee for serving as administrator.
Eaton Vance provides sub-transfer agency
and related services to Eaton Vance mutual funds pursuant to a Sub-Transfer Agency Support Services Agreement. For its services
under the agreement, Eaton Vance receives an aggregate fee from such funds equal to its actual expenses incurred in performing
such services.
3. The following replaces the
first paragraph under “Payments to Financial Intermediaries.” in “Purchasing Shares”:
Payments to Financial
Intermediaries. In addition to payments disclosed under “Sales Charges” below, the principal underwriter, out
of its own resources, may make cash payments to certain financial intermediaries (which may include affiliates of the principal
underwriter and investment adviser) who provide marketing support, transaction processing and/or administrative services and,
in some cases, include some or all Eaton Vance funds in preferred or specialized selling programs. Payments made by the principal
underwriter to a financial intermediary may be significant and are typically in the form of fees based on Fund sales, assets,
transactions processed and/or accounts attributable to that financial intermediary. Financial intermediaries also may receive
amounts from the principal underwriter in connection with educational or due diligence meetings that include information concerning
Eaton Vance funds. The principal underwriter may pay or allow other promotional incentives or payments to financial intermediaries
to the extent permitted by applicable laws and regulations.
4. The following replaces “Fund
Purchases through Edward D. Jones & Co., L.P. (“Edward Jones”)” under “Appendix A – Financial
Intermediary Sales Charge Variations”:
Policies Regarding Transactions Through Edward
D. Jones & Co., L.P. (“Edward Jones”)
The following information has been provided by Edward Jones:
Effective on or after March 1, 2021, the following information supersedes
prior information with respect to transactions and positions held in fund shares through an Edward Jones system. Clients of Edward
Jones (also referred to as “shareholders”) purchasing fund shares on the Edward Jones commission and fee-based platforms
are eligible only for the following sales charge discounts (also referred to as “breakpoints”) and waivers, which can
differ from discounts and waivers described elsewhere in the mutual fund prospectus or statement of additional information (“SAI”)
or through another broker-dealer. In all instances, it is the shareholder's responsibility to inform Edward Jones at the time of
purchase of any relationship, holdings of fund family or other facts qualifying the purchaser for discounts or waivers. Edward
Jones can ask for documentation from the shareholder of such circumstance. Shareholders should contact Edward Jones if they have
questions regarding their eligibility for these discounts and waivers.
Breakpoints
|
·
|
Breakpoint pricing, otherwise known as volume pricing, at dollar thresholds as described in the prospectus.
|
Rights of Accumulation (“ROA”)
|
·
|
The applicable sales charge on a purchase of Class A shares is determined by taking into account all share classes (except
certain money market funds and any assets held in group retirement plans) of the mutual fund family held by the shareholder or
in an account grouped by Edward Jones with other accounts for the purpose of providing certain pricing considerations (“pricing
groups”). If grouping assets as a shareholder, this includes all share classes held on the Edward Jones platform and/or held
on another platform. The inclusion of eligible fund family assets in the ROA calculation is dependent on the shareholder notifying
Edward Jones of such assets at the time of calculation. Money market funds are included only if such shares were sold with a sales
charge at the time of purchase or acquired in exchange for shares purchased with a sales charge.
|
|
·
|
The employer maintaining a SEP IRA plan and/or SIMPLE IRA plan may elect to establish or change ROA for the IRA accounts associated
with the plan to a plan-level grouping as opposed to including all share classes at a shareholder or pricing group level.
|
|
·
|
ROA is determined by calculating the higher of cost minus redemptions or market value (current shares x NAV).
|
Letter of Intent (“LOI”)
|
·
|
Through a LOI, shareholders can receive the sales charge and breakpoint discounts for purchases shareholders intend to make
over a 13-month period from the date Edward Jones receives the LOI. The LOI is determined by calculating the higher of cost or
market value of qualifying holdings at LOI initiation in combination with the value that the shareholder intends to buy over a
13-month period to calculate the front-end sales charge and any breakpoint discounts. Each purchase the shareholder makes during
that 13-month period will receive the sales charge and breakpoint discount that applies to the total amount. If during the 13-month
period the shareholder redeems any of the shares purchased pursuant to a LOI, the value of the redeemed shares will not be included
for purposes of satisfying the LOI. The inclusion of eligible fund family assets in the LOI calculation is dependent on the shareholder
notifying Edward Jones of such assets at the time of calculation. Purchases made before the LOI is received by Edward Jones are
not adjusted under the LOI and will not reduce the sales charge previously paid. Sales charges will be adjusted if LOI is not met.
|
|
·
|
If the employer maintaining a SEP IRA plan and/or SIMPLE IRA plan has elected to establish or change ROA for the IRA accounts
associated with the plan to a plan-level grouping, LOIs will also be at the plan-level and may only be established by the employer.
|
Front-end Sales Charge Waivers
Sales charges are waived for the following shareholders and
in the following situations:
|
·
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Associates of Edward Jones and its affiliates and their family members who are in the same pricing group (as determined by
Edward Jones under its policies and procedures) as the associate. This waiver will continue for the remainder of the associate's
life if the associate retires from Edward Jones in good-standing and remains in good standing pursuant to Edward Jones' policies
and procedures.
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·
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Shares purchased in an Edward Jones fee-based program.
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Shares purchased through reinvestment of capital gains distributions and dividend reinvestment.
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Shares purchased from the proceeds of redeemed shares of the same fund family so long as the following conditions are met: 1) the proceeds are from the sale of shares
within 60 days of the purchase, and 2) the sale and purchase are made in the same share class and the same account or the purchase
is made in an individual retirement account with proceeds from liquidations in a non-retirement account.
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·
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Shares exchanged into Class A shares from another share class so long as the exchange is into the same fund and was initiated
at the discretion of Edward Jones. Edward Jones is responsible for any remaining Contingent Deferred Sales Charge (“CDSC”)
due to the fund company or its affiliate, if applicable. Any future purchases are subject to the applicable sales charge as disclosed
in the prospectus.
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·
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Exchanges from Class C shares to Class A shares of the same fund, generally, in the 84th month following the anniversary of
the purchase date or earlier at the discretion of Edward Jones.
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CDSC Waivers
If the shareholder purchases shares that are subject to a CDSC
and those shares are redeemed before the CDSC is expired, the shareholder is responsible to pay the CDSC except in the following
conditions:
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·
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The death or disability of the shareholder.
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Systematic withdrawals with up to 10% per year of the account value.
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Return of excess contributions from an Individual Retirement Account (IRA).
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Shares sold as part of a required minimum distribution for IRA and retirement accounts if the redemption is taken in or after
the year the shareholder reaches qualified age based on applicable IRS regulations.
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·
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Shares sold to pay Edward Jones fees or costs in such cases where the transaction is initiated by Edward Jones. Edward Jones
is responsible for any remaining CDSC due to the fund company or its affiliate, if applicable.
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·
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Shares exchanged in an Edward Jones fee-based program. Edward Jones is responsible for any remaining CDSC due to the fund company
or its affiliate, if applicable.
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·
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Shares acquired through NAV reinstatement.
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·
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Shares redeemed at the discretion of Edward Jones for Minimum Balances as described below.
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******************************************************************************
Other Important Information Regarding Transactions Through Edward Jones
Minimum Purchase Amounts
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Initial purchase minimum: $250
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Subsequent purchase minimum: none
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Minimum Balances
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Edward Jones has the right to redeem at its discretion fund holdings with a balance of $250 or less. The following are examples
of accounts that are not included in this policy:
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A fee-based account held on an Edward Jones platform
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A 529 account held on an Edward Jones platform
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·
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An account with an active systematic investment plan or LOI
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Exchanging Share Classes
At any time it deems necessary, Edward Jones has the authority to exchange
at NAV a shareholder's holdings in a fund to Class A shares of the same fund. Edward Jones is responsible for any remaining CDSC
due to the fund company or its affiliate, if applicable. Any future purchases are subject to the applicable sales charge as disclosed
in the prospectus.
March 1, 2021
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37964 3.1.21
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EATON VANCE CORE BOND FUND
Supplement to Statement
of Additional Information dated May 1, 2020
1. The following replaces the
first paragraph under “Fund Management.” in “Management and Organization”:
Fund Management.
The Trustees of the Trust are responsible for the overall management and supervision of the affairs
of the Trust. The Trustees of the Portfolio are responsible for the overall management and supervision of the Portfolio. The Board
members and officers of the Trust and Portfolio are listed below. Except as indicated, each individual has held the office shown
or other offices in the same company for the last five years. Board members hold indefinite terms of office. Each Trustee holds
office until his or her successor is elected and qualified, subject to a prior death, resignation, retirement, disqualification
or removal. Under the terms of the Fund’s and the Portfolio’s current Trustee retirement policy, an Independent
Trustee must retire and resign as a Trustee on the earlier of: (i) the first day of July following his or her 74th birthday; or
(ii), with limited exception, December 31st of the 20th year in which he or she has served as a Trustee. However, if such retirement
and resignation would cause the Fund or Portfolio to be out of compliance with Section 16 of the 1940 Act or any other regulations
or guidance of the SEC, then such retirement and resignation will not become effective until such time as action has been taken
for the Fund or Portfolio to be in compliance therewith. The “noninterested Trustees” consist of those Trustees
who are not “interested persons” of the Trust and the Portfolio, as that term is defined under the 1940 Act. The business
address of each Board member and officer is Two International Place, Boston, Massachusetts 02110. As used in this SAI, “EVC”
refers to Eaton Vance Corp., “EV” refers to Eaton Vance, Inc., “Eaton Vance” refers to Eaton Vance Management
and “EVD” refers to Eaton Vance Distributors, Inc. (see “Principal Underwriter” under “Other Service
Providers”). EV is the trustee of each of Eaton Vance and BMR. Effective March 1, 2021, each of Eaton Vance, BMR, EVD and
EV are indirect wholly-owned subsidiaries of Morgan Stanley. Each officer affiliated with Eaton Vance may hold a position with
other Eaton Vance affiliates that is comparable to his or her position with Eaton Vance listed below.
2. The following replaces the
Thomas E. Faust Jr. row in the Trustees table and in his biographical narrative in “Management and Organization”:
THOMAS E. FAUST JR.
1958
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Trustee
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Since 2007
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Chairman of Morgan Stanley Investment Management, Inc. (MSIM), Director and President of EV, Chief Executive Officer and President of Eaton Vance and BMR, and Director of EVD. Formerly, Chairman, Chief Executive Officer and President of EVC. Trustee and/or officer of 141 registered investment companies. Mr. Faust is an interested person because of his positions with MSIM, BMR, Eaton Vance, EVD and EV, which are affiliates of the Trust and Portfolio, and his former position with EVC, which was an affiliate of the Trust prior to March 1, 2021.
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141
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Formerly, Director of EVC (2007-2021) and Hexavest Inc. (2012-2021) (investment management firm).
|
Thomas E. Faust
Jr. Mr. Faust has served as a member of the Eaton Vance Fund Boards since 2007. Effective March 1, 2021, he is Chairman
of MSIM. He is also Director and President of EV, Chief Executive Officer and President of Eaton Vance and BMR, and Director of
EVD. Mr. Faust previously served as Chairman and Chief Executive Officer of EVC from 2007 through March 1, 2021 and as President
of EVC from 2006 through March 1, 2021. Mr. Faust served as a Director of Hexavest Inc. from 2012-2021. From 2016 through 2019,
Mr. Faust served as a Director of SigFig Wealth Management LLC. Mr. Faust previously served as an equity analyst, portfolio manager,
Director of Equity Research and Management and Chief Investment Officer of Eaton Vance from 1985-2007. He holds B.S. degrees in
Mechanical Engineering and Economics from the Massachusetts Institute of Technology and an MBA from Harvard Business School. Mr.
Faust has been a Chartered Financial Analyst since 1988. He is a trustee and member of the executive committee of the Boston Symphony
Orchestra, Inc. and trustee emeritus of Wellesley College.
3. The following replaces the
first and second paragraphs under “Investment Advisory Services.” in “Investment Advisory and Administrative
Services”:
Investment Advisory
Services. As described in the Prospectus, upon the closing of the transaction by which Morgan Stanley acquired EVC, the
Fund and the Portfolio entered into a new investment advisory agreement with Eaton Vance or BMR as applicable. Each investment
adviser manages the investments and affairs of the Portfolio and the Fund and provides related office facilities and personnel
subject to the supervision of the Trust's Board, in the case of the Fund, or the Portfolio’s Board. Each investment adviser
furnishes investment research, advice and supervision, furnishes an investment program and determines what securities will be purchased,
held or sold by the Portfolio and the Fund and what portion, if any, of the Portfolio’s, and the Fund’s assets will
be held uninvested. Each Investment Advisory Agreement requires the investment adviser to pay the compensation and expenses of
all officers and Trustees who are members of the investment adviser's organization and all personnel of the investment adviser
performing services relating to research and investment activities.
As described in the Prospectus, Eaton Vance serves as investment adviser
for the Fund effective March 1, 2021. For a description of the compensation that the Portfolio or the Fund pays the investment
adviser under its investment advisory agreement, see the Prospectus.
4. The following replaces the
last paragraph under “Investment Advisory Services.” in “Investment Advisory and Administrative Services”:
Each Investment Advisory Agreement with the investment adviser continues
in effect through and including the second anniversary of its execution and shall continue in full force and effect indefinitely
thereafter, but only so long as such continuance after such second anniversary is specifically approved at least annually (i) by
the vote of a majority of the noninterested Trustees of the Trust, in the case of the Fund, or the Portfolio, in the case of the
Portfolio, cast in person at a meeting specifically called for the purpose of voting on such approval and (ii) by the Board of
the Trust, in the case of the Fund, or the Portfolio, in the case of the Portfolio, or by vote of a majority of the outstanding
voting securities of the Portfolio or Fund. Each Agreement may be terminated at any time without penalty on sixty (60) days’
written notice by either party, or by vote of the majority of the outstanding voting securities of the Portfolio or Fund, and each
Agreement will terminate automatically in the event of its assignment. Each Agreement provides that the investment adviser
may render services to others. Each Agreement also provides that the investment adviser shall not be liable for any loss incurred
in connection with the performance of its duties, or action taken or omitted under the Agreement, in the absence of willful misfeasance,
bad faith, gross negligence or reckless disregard of its obligations and duties thereunder, or for any losses sustained in the
acquisition, holding or disposition of any security or other investment. Each Agreement is not intended to, and does not, confer
upon any person not a party to it any right, benefit or remedy of any nature.
5. The following replaces “Information
About BMR and Eaton Vance.” in “Investment Advisory and Administrative Services”:
Information About
BMR and Eaton Vance. BMR and Eaton Vance are business trusts organized under the laws of the Commonwealth of Massachusetts.
EV serves as trustee of BMR and Eaton Vance. As described in the Prospectus, following the closing of the Transaction on March
1, 2021, EV, Eaton Vance and BMR became indirect wholly-owned subsidiaries of Morgan Stanley (NYSE: MS), a preeminent
global financial services firm engaged in securities trading and brokerage activities, as well as providing investment banking,
research and analysis, financing and financial advisory services.
Prior to March 1, 2021, EV and Eaton Vance were wholly-owned subsidiaries
of EVC, a Maryland corporation and publicly-held holding company and BMR was an indirect wholly owned subsidiary of EVC. EVC through
its subsidiaries and affiliates engaged primarily in investment management, administration and marketing activities. The Directors
of EVC were Thomas E. Faust Jr., Ann E. Berman, Leo I. Higdon, Jr., Paula A. Johnson, Brian D. Langstraat, Dorothy E. Puhy, Winthrop
H. Smith, Jr. and Richard A. Spillane, Jr. All shares of the outstanding Voting Common Stock of EVC were deposited in a Voting
Trust, the Voting Trustees of which were Mr. Faust, Paul W. Bouchey, Craig R. Brandon, Daniel C. Cataldo, Michael A. Cirami, Cynthia
J. Clemson, James H. Evans, Maureen A. Gemma, Laurie G. Hylton, Mr. Langstraat, Thomas Lee, Frederick S. Marius, David C. McCabe,
Edward J. Perkin, Lewis R. Piantedosi, Charles B. Reed, Craig P. Russ, Thomas C. Seto, John L. Shea, Eric A. Stein, John H. Streur,
Andrew N. Sveen, Payson F. Swaffield, R. Kelly Williams and Matthew J. Witkos (all of whom are or were officers of Eaton Vance
or its affiliates). The Voting Trustees had unrestricted voting rights for the election of Directors of EVC. Prior to March 1,
2021, all of the outstanding voting trust receipts issued under said Voting Trust were owned by certain of the officers of BMR
and Eaton Vance who may also have been officers, or officers and Directors of EVC and EV. As indicated under “Management
and Organization,” all of the officers of the Trust (as well as Mr. Faust who is also a Trustee) are employees of Eaton Vance
and/or BMR.
6. The following replaces “Compensation
Structure for Eaton Vance and BMR.” and “Method to Determine Compensation.” under “Portfolio Managers.”
in “Investment Advisory and Administrative Services”:
Compensation Structure
for Eaton Vance and BMR. Compensation of the investment adviser's portfolio managers and other investment professionals
has the following primary components: (1) a base salary, (2) an annual cash bonus, and (3) annual non-cash compensation consisting
of restricted shares of Morgan Stanley stock that are subject to a fixed vesting and distribution schedule. The investment adviser’s
investment professionals also receive certain retirement, insurance and other benefits that are broadly available to the investment
adviser’s employees. Compensation of the investment adviser’s investment professionals is reviewed primarily on an
annual basis. Cash bonuses, stock-based compensation awards, and adjustments in base salary are typically paid or put into effect
at or shortly after the December 31st fiscal year end of Morgan Stanley.
Method to Determine
Compensation. The investment adviser compensates its portfolio managers based primarily on the scale and complexity
of their portfolio responsibilities and the total return performance of managed funds and accounts versus the benchmark(s) stated
in the prospectus, as well as an appropriate peer group (as described below). In addition to rankings within peer groups of funds
on the basis of absolute performance, consideration may also be given to relative risk-adjusted performance. Risk-adjusted performance
measures include, but are not limited to, the Sharpe ratio, which uses standard deviation and excess return to determine reward
per unit of risk. Performance is normally based on periods ending on the September 30th preceding fiscal year end. Fund performance
is normally evaluated primarily versus peer groups of funds as determined by Lipper Inc. and/or Morningstar, Inc. When a fund’s
peer group as determined by Lipper or Morningstar is deemed by the investment adviser’s management not to provide a fair
comparison, performance may instead be evaluated primarily against a custom peer group or market index. In evaluating the performance
of a fund and its manager, primary emphasis is normally placed on three-year performance, with secondary consideration of performance
over longer and shorter periods. For funds that are tax-managed or otherwise have an objective of after-tax returns, performance
is measured net of taxes. For other funds, performance is evaluated on a pre-tax basis. For funds with an investment objective
other than total return (such as current income), consideration will also be given to the fund’s success in achieving its
objective. For managers responsible for multiple funds and accounts, investment performance is evaluated on an aggregate basis,
based on averages or weighted averages among managed funds and accounts. Funds and accounts that have performance-based advisory
fees are not accorded disproportionate weightings in measuring aggregate portfolio manager performance.
The compensation of portfolio managers with other job responsibilities (such
as heading an investment group or providing analytical support to other portfolios) will include consideration of the scope of
such responsibilities and the managers’ performance in meeting them.
The investment adviser seeks to compensate portfolio managers commensurate
with their responsibilities and performance, and competitive with other firms within the investment management industry. The investment
adviser participates in investment-industry compensation surveys and utilizes survey data as a factor in determining salary, bonus
and stock-based compensation levels for portfolio managers and other investment professionals. Salaries, bonuses and stock-based
compensation are also influenced by the operating performance of the investment adviser and Morgan Stanley. The overall annual
cash bonus pool is generally based on a substantially fixed percentage of pre-bonus adjusted operating income. While the salaries
of the investment adviser’s portfolio managers are comparatively fixed, cash bonuses and stock-based compensation may fluctuate
significantly from year to year, based on changes in manager performance and other factors as described herein. For a high performing
portfolio manager, cash bonuses and stock-based compensation may represent a substantial portion of total compensation.
7. The following replaces the
first two paragraphs in “Other Service Providers”:
Principal Underwriter.
Eaton Vance Distributors, Inc. (“EVD”), Two International Place, Boston, MA 02110 is
the principal underwriter of the Fund. The principal underwriter acts as principal in selling shares under a Distribution Agreement
with the Trust. The expenses of printing copies of prospectuses used to offer shares and other selling literature and of advertising
are borne by the principal underwriter. The fees and expenses of qualifying and registering and maintaining qualifications and
registrations of the Fund and its shares under federal and state securities laws are borne by the Fund. The Distribution Agreement
is renewable annually by the members of the Board (including a majority of the noninterested Trustees who have no direct or indirect
financial interest in the operation of the Distribution Agreement or any applicable Distribution Plan), may be terminated on sixty
days’ notice either by such Trustees or by vote of a majority of the outstanding Fund shares or on six months’ notice
by the principal underwriter and is automatically terminated upon assignment. The principal underwriter distributes shares on a
“best efforts” basis under which it is required to take and pay for only such shares as may be sold. Effective March
1, 2021, EVD is an indirect wholly-owned subsidiary of Morgan Stanley. Prior to March 1, 2021, EVD was a direct, wholly-owned subsidiary
of EVC. Mr. Faust is also a Director of EVD. EVD also serves as placement agent for the Portfolio, if applicable.
Custodian.
State Street Bank and Trust Company (“State Street”), State Street Financial Center,
One Lincoln Street, Boston, MA 02111, serves as custodian to the Fund and Portfolio, if applicable. State Street has custody of
all cash and securities representing the Fund’s interest in the Portfolio, has custody of the Portfolio’s and
the Fund's assets, maintains the general ledger of the Portfolio and the Fund and computes the daily net asset value of interests
in the Portfolio and the net asset value of shares of the Fund. In such capacity it attends to details in connection with the sale,
exchange, substitution, transfer or other dealings with the Fund's and the Portfolio’s investments, receives and disburses
all funds and performs various other ministerial duties upon receipt of proper instructions from the Trust and the Portfolio. State
Street also provides services in connection with the preparation of shareholder reports and the electronic filing of such reports
with the SEC.
8. The following replaces the
first, second, fourth, sixth and seventh paragraphs in “Portfolio Securities Transactions”:
Decisions concerning the execution of portfolio security transactions,
including the selection of the market and the broker-dealer firm or other financial intermediary (each an “intermediary”),
are made by the investment adviser. The Fund and Portfolio are responsible for the expenses associated with their portfolio transactions.
The investment adviser is also responsible for the execution of transactions for all other accounts managed by it. The investment
adviser places the portfolio security transactions for execution with one or more intermediaries firms. The investment adviser
uses its best efforts to obtain execution of portfolio security transactions at prices that, in the investment adviser’s
judgment, are advantageous to the client and at a reasonably competitive spread or (when a disclosed commission is being charged)
at reasonably competitive commission rates. In seeking such execution, the investment adviser will use its best judgment in evaluating
the terms of a transaction, and will give consideration to various relevant factors, which may include, without limitation, the
full range and quality of the intermediary’s services, responsiveness of the intermediary to the investment adviser, the
size and type of the transaction, the nature and character of the market for the security, the confidentiality, speed and certainty
of effective execution required for the transaction, the general execution and operational capabilities of the intermediary, the
reputation, reliability, experience and financial condition of the intermediary, the value and quality of the services rendered
by the intermediary in this and other transactions, and the amount of the spread or commission, if any. In addition, the investment
adviser may consider the receipt of Research Services (as defined below), provided it does not compromise the investment adviser’s
obligation to seek best overall execution for the Fund or Portfolio and is otherwise in compliance with applicable law. The investment
adviser may engage in portfolio transactions with an intermediary that sells shares of Eaton Vance funds, provided such transactions
are not directed to that intermediary as compensation for the promotion or sale of such shares.
As described in the Prospectus, following the closing of the Transaction
on March 1, 2021, the investment adviser became an “affiliated person,” as defined in the 1940 Act, of Morgan Stanley
and its affiliates, including certain intermediaries (as previously defined). As a result, the investment adviser is subject to
certain restrictions regarding transactions with Morgan Stanley-affiliated intermediaries, as set forth in the 1940 Act. Under
certain circumstances, such restrictions may limit the investment adviser’sability to place portfolio transactions on behalf
of a Fund or Portfolio at the desired time or price. Any transaction the investment adviser enters into with a Morgan Stanley-affiliated
intermediary on behalf of a Fund or Portfolio will be done in compliance with applicable laws, rules, and regulations; will be
subject to any restrictions contained in a Fund’s or Portfolio’s investment advisory agreement; will be subject to
the investment adviser’s duty to seek best execution; and, will comply with any applicable policies and procedures of the
investment adviser, as described below.
Subject to the overriding objective of obtaining the best execution of
orders and applicable rules and regulations, as described above, a Fund or Portfolio may use an affiliated intermediary, including
a Morgan Stanley-affiliated intermediary, to effect Fund or Portfolio portfolio transactions, including transactions in futures
contracts and options on futures contracts, under procedures adopted by the Board. In order to use such affiliated intermediaries,
the Fund’s or Portfolio’s Board must approve and periodically review procedures reasonably designed to ensure that
commission rates and other remuneration paid to the affiliated intermediaries are fair and reasonable in comparison to those of
other intermediaries for comparable transactions involving similar securities being purchased or sold during a comparable time
period.
Pursuant to an order issued by the SEC, a Fund or Portfolio is permitted
to engage in principal transactions in money market instruments, subject to certain conditions, with Morgan Stanley & Co. LLC,
a broker-dealer affiliated with Morgan Stanley.
Transactions on stock exchanges and other agency transactions involve the
payment of negotiated brokerage commissions. Such commissions vary among different broker-dealer firms, and a particular broker-dealer
may charge different commissions according to such factors as the difficulty and size of the transaction and the volume of business
done with such broker-dealer. Transactions in foreign securities often involve the payment of brokerage commissions, which may
be higher than those in the United States. There is generally no stated commission in the case of securities traded in the over-the-counter
markets including transactions in fixed-income securities which are generally purchased and sold on a net basis (i.e., without
commission) through intermediaries and banks acting for their own account rather than as brokers. Such intermediaries attempt to
profit from such transactions by buying at the bid price and selling at the higher asked price of the market for such obligations,
and the difference between the bid and asked price is customarily referred to as the spread. Fixed-income transactions may also
be transacted directly with the issuer of the obligations. In an underwritten offering the price paid often includes a disclosed
fixed commission or discount retained by the underwriter or dealer. Although spreads or commissions paid on portfolio security
transactions will, in the judgment of the investment adviser, be reasonable in relation to the value of the services provided,
commissions exceeding those which another firm might charge may be paid to intermediaries who were selected to execute transactions
on behalf of the investment adviser’s clients in part for providing brokerage and research services to the investment adviser
as permitted by applicable law.
Research Services provided by (and produced by) broker-dealers that execute
portfolio transactions or from affiliates of executing broker-dealers are referred to as “Proprietary Research.” Except
for trades executed in jurisdictions where such consideration is not permissible, the investment adviser may and does consider
the receipt of Proprietary Research Services as a factor in selecting broker dealers to execute client portfolio transactions,
provided it does not compromise the investment adviser’s obligation to seek best overall execution. In jurisdictions where
permissible, the investment adviser also may consider the receipt of Research Services under so called “client commission
arrangements” or “commission sharing arrangements” (both referred to as “CCAs”) as a factor in selecting
broker dealers to execute transactions, provided it does not compromise the investment adviser’s obligation to seek best
overall execution. Under a CCA arrangement, the investment adviser may cause client accounts to effect transactions through a broker-dealer
and request that the broker-dealer allocate a portion of the commissions paid on those transactions to a pool of commission credits
that are paid to other firms that provide Research Services to the investment adviser. Under a CCA, the broker-dealer that provides
the Research Services need not execute the trade. Participating in CCAs may enable the investment adviser to consolidate payments
for research using accumulated client commission credits from transactions executed through a particular broker-dealer to periodically
pay for Research Services obtained from and provided by other firms, including other broker-dealers that supply Research Services.
The investment adviser believes that CCAs offer the potential to optimize the execution of trades and the acquisition of a variety
of high quality Research Services that the investment adviser might not be provided access to absent CCAs. The investment adviser
may enter into CCA arrangements with a number of broker-dealers and other firms, including certain affiliates of the investment
adviser. The investment adviser will only enter into and utilize CCAs to the extent permitted by Section 28(e) and other applicable
law.
The investment companies sponsored by the investment adviser or certain
of its affiliates also may allocate brokerage commissions to acquire information relating to the
performance, fees and expenses of such companies and other investment companies, which information is used by the members
of the Board of such companies to fulfill their responsibility to oversee the quality of the services provided to various entities,
including the investment adviser, to such companies. Such companies may also pay cash for such information.
Securities considered as investments for
the Fund and Portfolio may also be appropriate for other investment accounts managed by the investment adviser or certain of its
affiliates. Whenever decisions are made to buy or sell securities by the Fund or Portfolio and one or more of such other accounts
simultaneously, the investment adviser will allocate the security transactions (including “new” issues) in a manner
which it believes to be equitable under the circumstances. As a result of such allocations, there may be instances where the Fund
or Portfolio will not participate in a transaction that is allocated among other accounts. If an aggregated order cannot be filled
completely, allocations will generally be made on a pro rata basis. An order may not be allocated on a pro rata basis where, for
example: (i) consideration is given to portfolio managers who have been instrumental in developing or negotiating a particular
investment; (ii) consideration is given to an account with specialized investment policies that coincide with the particulars of
a specific investment; (iii) pro rata allocation would result in odd-lot or de minimis amounts being allocated to a portfolio or
other client; or (iv) where the investment adviser reasonably determines that departure from a pro rata allocation is advisable.
While these aggregation and allocation policies could have a detrimental effect on the price or amount of the securities available
to the Fund or Portfolio from time to time, it is the opinion of the members of the Board that the benefits from the investment
adviser organization outweigh any disadvantage that may arise from exposure to simultaneous transactions.
9. The following is added as
a new section immediately prior to “Financial Statements”:
POTENTIAL CONFLICTS OF INTEREST
As a diversified global financial services firm, Morgan Stanley engages
in a broad spectrum of activities, including financial advisory services, investment management activities, lending, commercial
banking, sponsoring and managing private investment funds, engaging in broker-dealer transactions and principal securities, commodities
and foreign exchange transactions, research publication and other activities. In the ordinary course of its business, Morgan Stanley
is a full-service investment banking and financial services firm and therefore engages in activities where Morgan Stanley’s
interests or the interests of its clients may conflict with the interests of a Fund or Portfolio, if applicable, (collectively
for the purposes of this section, “Fund” or “Funds”). Morgan Stanley advises clients and sponsors, manages
or advises other investment funds and investment programs, accounts and businesses (collectively, together with the Funds, any
new or successor funds, programs, accounts or businesses, the ‘‘Affiliated Investment Accounts’’) with
a wide variety of investment objectives that in some instances may overlap or conflict with a Fund’s investment objectives
and present conflicts of interest. In addition, Morgan Stanley may also from time to time create new or successor Affiliated Investment
Accounts that may compete with a Fund and present similar conflicts of interest. The discussion below enumerates certain actual,
apparent and potential conflicts of interest. There is no assurance that conflicts of interest will be resolved in favor of Fund
shareholders and, in fact, they may not be. Conflicts of interest not described below may also exist.
Material Non-public
and Other Information. It is expected that confidential or material non-public information regarding an investment or potential
investment opportunity may become available to the investment adviser. If such information becomes available, the investment adviser
may be precluded (including by applicable law or internal policies or procedures) from pursuing an investment or disposition opportunity
with respect to such investment or investment opportunity.
The investment adviser may also from time to time be subject to contractual
‘‘stand-still’’ obligations and/or confidentiality obligations that may restrict its ability to trade in
certain investments on a Fund’s behalf. In addition, the investment adviser may be precluded from disclosing such information
to an investment team, even in circumstances in which the information would be beneficial if disclosed. Therefore, the investment
team may not be provided access to material non-public information in the possession of Morgan Stanley that might be relevant to
an investment decision to be made on behalf of a Fund, and the investment team may initiate a transaction or sell an investment
that, if such information had been known to it, may not have been undertaken. In addition, certain members of the investment team
may be recused from certain investment-related discussions so that such members do not receive information that would limit their
ability to perform functions of their employment with the investment adviser or its affiliates unrelated to that of a Fund. Furthermore,
access to certain parts of Morgan Stanley may be subject to third party confidentiality obligations and to information barriers
established by Morgan Stanley in order to manage potential conflicts of interest and regulatory restrictions, including without
limitation joint transaction restrictions pursuant to the 1940 Act. Accordingly, the investment adviser’s ability to source
investments from other business units within Morgan Stanley may be limited and there can be no assurance that the investment adviser
will be able to source any investments from any one or more parts of the Morgan Stanley network.
The investment adviser may restrict its investment decisions and activities
on behalf of the Funds in various circumstances, including because of applicable regulatory requirements or information held by
the investment adviser or Morgan Stanley. The investment adviser might not engage in transactions or other activities for, or enforce
certain rights in favor of, a Fund due to Morgan Stanley’s activities outside the Funds. In instances where trading of an
investment is restricted, the investment adviser may not be able to purchase or sell such investment on behalf of a Fund, resulting
in the Fund’s inability to participate in certain desirable transactions. This inability to buy or sell an investment could
have an adverse effect on a Fund’s portfolio due to, among other things, changes in an investment’s value during the
period its trading is restricted. Also, in situations where the investment adviser is required to aggregate its positions with
those of other Morgan Stanley business units for position limit calculations, the investment adviser may have to refrain from making
investments due to the positions held by other Morgan Stanley business units or their clients. There may be other situations where
the investment adviser refrains from making an investment due to additional disclosure obligations, regulatory requirements, policies,
and reputational risk, or the investment adviser may limit purchases or sales of securities in respect of which Morgan Stanley
is engaged in an underwriting or other distribution capacity.
Morgan Stanley has established certain information barriers and other
policies to address the sharing of information between different businesses within Morgan Stanley. As a result of information barriers,
the investment adviser generally will not have access, or will have limited access, to certain information and personnel in other
areas of Morgan Stanley relating to business transactions for clients (including transactions in investing, banking, prime brokerage
and certain other areas), and generally will not manage the Funds with the benefit of the information held by such other areas.
Morgan Stanley, due to its access to and knowledge of funds, markets and securities based on its prime brokerage and other businesses,
may make decisions based on information or take (or refrain from taking) actions with respect to interests in investments of the
kind held (directly or indirectly) by the Funds in a manner that may be adverse to the Funds, and will not have any obligation
or other duty to share information with the investment adviser.
In limited circumstances, however, including for purposes of managing
business and reputational risk, and subject to policies and procedures, Morgan Stanley personnel, including personnel of the investment
adviser, on one side of an information barrier may have access to information and personnel on the other side of the information
barrier through “wall crossings.” The investment adviser faces conflicts of interest in determining whether to engage
in such wall crossings. Information obtained in connection with such wall crossings may limit or restrict the ability of the investment
adviser to engage in or otherwise effect transactions on behalf of the Funds (including purchasing or selling securities that the
investment adviser may otherwise have purchased or sold for a Fund in the absence of a wall crossing). In managing conflicts of
interest that arise because of the foregoing, the investment adviser generally will be subject to fiduciary requirements. The investment
adviser may also implement internal information barriers or ethical walls, and the conflicts described herein with respect to information
barriers and otherwise with respect to Morgan Stanley and the investment adviser will also apply internally within the investment
adviser. As a result, a Fund may not be permitted to transact in (e.g., dispose of a security in whole or in part) during periods
when it otherwise would have been able to do so, which could adversely affect a Fund. Other investors in the security that are
not subject to such restrictions may be able to transact in the security during such periods. There may also be circumstances in
which, as a result of information held by certain portfolio management teams in the investment adviser, the investment adviser
limits an activity or transaction for a Fund, including if the Fund is managed by a portfolio management team other than the team
holding such information.
Investments by Morgan
Stanley and its Affiliated Investment Accounts. In serving in multiple capacities to Affiliated Investment Accounts, Morgan
Stanley, including the investment adviser and its investment teams, may have obligations to other clients or investors in Affiliated
Investment Accounts, the fulfillment of which may not be in the best interests of a Fund or its shareholders. A Fund’s investment
objectives may overlap with the investment objectives of certain Affiliated Investment Accounts. As a result, the members of an
investment team may face conflicts in the allocation of suitable investment opportunities among a Fund and other investment funds,
programs, accounts and businesses advised by or affiliated with the investment adviser. Certain Affiliated Investment Accounts
may provide for higher management or incentive fees or greater expense reimbursements or overhead allocations, all of which may
contribute to this conflict of interest and create an incentive for the investment adviser to favor such other accounts.
Morgan Stanley currently invests and plans to continue to invest on its
own behalf and on behalf of its Affiliated Investment Accounts in a wide variety of investment opportunities globally. Morgan Stanley
and its Affiliated Investment Accounts, to the extent consistent with applicable law and policies and procedures, will be permitted
to invest in investment opportunities without making such opportunities available to a Fund beforehand. Subject to the foregoing,
Morgan Stanley may offer investments that fall into the investment objectives of an Affiliated Investment Account to such account
or make such investment on its own behalf, even though such investment also falls within a Fund’s investment objectives.
A Fund may invest in opportunities that Morgan Stanley and/or one or more Affiliated Investment Accounts has declined, and vice
versa. All of the foregoing may reduce the number of investment opportunities available to a Fund and may create conflicts of interest
in allocating investment opportunities. Investors should note that the conflicts inherent in making such allocation decisions may
not always be resolved to a Fund’s advantage. There can be no assurance that a Fund will have an opportunity to participate
in certain opportunities that fall within their investment objectives.
To seek to reduce potential conflicts of interest and to attempt to allocate
such investment opportunities in a fair and equitable manner, the investment adviser has implemented allocation policies and procedures.
These policies and procedures are intended to give all clients of the investment adviser, including the Funds, fair access to investment
opportunities consistent with the requirements of organizational documents, investment strategies, applicable laws and regulations,
and the fiduciary duties of the investment adviser. Each client of the investment adviser that is subject to the allocation policies
and procedures, including each Fund, is assigned an investment team and portfolio manager(s) by the investment adviser. The investment
team and portfolio managers review investment opportunities and will decide with respect to the allocation of each opportunity
considering various factors and in accordance with the allocation policies and procedures. The allocation policies and procedures
are subject to change. Investors should note that the conflicts inherent in making such allocation decisions may not always be
resolved to the advantage of a Fund.
It is possible that Morgan Stanley or an Affiliated Investment Account,
including another Eaton Vance fund, will invest in or advise a company that is or becomes a competitor of a company of which a
Fund holds an investment. Such investment could create a conflict between the Fund, on the one hand, and Morgan Stanley or the
Affiliated Investment Account, on the other hand. In such a situation, Morgan Stanley may also have a conflict in the allocation
of its own resources to the portfolio investment. Furthermore, certain Affiliated Investment Accounts will be focused primarily
on investing in other funds which may have strategies that overlap and/or directly conflict and compete with a Fund.
In addition, certain investment professionals who are involved in a Fund’s
activities remain responsible for the investment activities of other Affiliated Investment Accounts managed by the investment adviser
and its affiliates, and they will devote time to the management of such investments and other newly created Affiliated Investment
Accounts (whether in the form of funds, separate accounts or other vehicles), as well as their own investments. In addition, in
connection with the management of investments for other Affiliated Investment Accounts, members of Morgan Stanley and its affiliates
may serve on the boards of directors of or advise companies which may compete with a Fund’s portfolio investments. Moreover,
these Affiliated Investment Accounts managed by Morgan Stanley and its affiliates may pursue investment opportunities that may
also be suitable for a Fund.
It should be noted that Morgan Stanley may, directly or indirectly, make
large investments in certain of its Affiliated Investment Accounts, and accordingly Morgan Stanley’s investment in a Fund
may not be a determining factor in the outcome of any of the foregoing conflicts. Nothing herein restricts or in any way limits
the activities of Morgan Stanley, including its ability to buy or sell interests in, or provide financing to, equity and/or debt
instruments, funds or portfolio companies, for its own accounts or for the accounts of Affiliated Investment Accounts or other
investment funds or clients in accordance with applicable law.
Different clients of the investment adviser, including a Fund, may invest
in different classes of securities of the same issuer, depending on the respective clients’ investment objectives and policies.
As a result, the investment adviser and its affiliates, at times, will seek to satisfy fiduciary obligations to certain clients
owning one class of securities of a particular issuer by pursuing or enforcing rights on behalf of those clients with respect to
such class of securities, and those activities may have an adverse effect on another client which owns a different class of securities
of such issuer. For example, if one client holds debt securities of an issuer and another client holds equity securities
of the same issuer, if the issuer experiences financial or operational challenges, the investment adviser and its affiliates may
seek a liquidation of the issuer on behalf of the client that holds the debt securities, whereas the client holding the equity
securities may benefit from a reorganization of the issuer. Thus, in such situations, the actions taken by the investment adviser
or its affiliates on behalf of one client can negatively impact securities held by another client. These conflicts also exist as
between the investment adviser’s clients, including the Funds, and the Affiliated Investment Accounts managed by Morgan Stanley.
The investment adviser and its affiliates may give advice and recommend
securities to other clients which may differ from advice given to, or securities recommended or bought for, a Fund even though
such other clients’ investment objectives may be similar to those of the Fund.
The investment adviser and its affiliates manage long and short portfolios.
The simultaneous management of long and short portfolios creates conflicts of interest in portfolio management and trading in that
opposite directional positions may be taken in client accounts managed by the same investment team, and creates risks such as:
(i) the risk that short sale activity could adversely affect the market value of long positions in one or more portfolios (and
vice versa) and (ii) the risks associated with the trading desk receiving opposing orders in the same security simultaneously.
The investment adviser and its affiliates have adopted policies and procedures that are reasonably designed to mitigate these conflicts.
In certain circumstances, the investment adviser invest on behalf of itself in securities and other instruments that would be appropriate
for, held by, or may fall within the investment guidelines of its clients, including a Fund. At times, the investment adviser will
give advice or take action for its own accounts that differs from, conflicts with, or is adverse to advice given or action taken
for any client.
From time to time, conflicts also arise due to the fact that certain securities
or instruments maybe held in some client accounts, including a Fund, but not in others, or the client accounts may have different
levels of holdings in certain securities or instruments, and because the accounts pay different levels of fees to the investment
adviser. In addition, at times an investment adviser investment team will give advice or take action with respect to the investments
of one or more clients that is not given or taken with respect to other clients with similar investment programs, objectives, and
strategies. Accordingly, clients with similar strategies will not always hold the same securities or instruments or achieve the
same performance. The investment adviser’s investment teams also advise clients with conflicting programs, objectives or
strategies. These conflicts also exist as between the investment adviser’s clients, including the Funds, and the Affiliated
Investment Accounts managed by Morgan Stanley.
The investment adviser maintains separate trading desks by investment
team and generally based on asset class, including two trading desks trading equity securities. These trading desks operate independently
of one another. The two equity trading desks do not share information. The separate equity trading desks may result in one desk
competing against the other desk when implementing buy and sell transactions, possibly causing certain accounts to pay more or
receive less for a security than other accounts. In addition, Morgan Stanley and its affiliates maintain separate trading desks
that operate independently of each other and do not share information with the investment adviser. The Morgan Stanley and affiliate
trading desks may compete against the investment adviser trading desks when implementing buy and sell transactions, possibly causing
certain Affiliated Investment Accounts to pay more or receive less for a security than other Affiliated Investment Accounts.
Payments to Broker-Dealers
and Other Financial Intermediaries. The investment adviser and/or EVD may pay compensation, out of their own funds and not
as an expense of the Funds, to certain financial intermediaries (which may include affiliates of the investment adviser and EVD),
including recordkeepers and administrators of various deferred compensation plans, in connection with the sale, distribution, marketing
and retention of shares of the Funds and/or shareholder servicing. For example, the investment adviser or EVD may pay additional
compensation to a financial intermediary for, among other things, promoting the sale and distribution of Fund shares, providing
access to various programs, mutual fund platforms or preferred or recommended mutual fund lists that may be offered by a financial
intermediary, granting EVD access to a financial intermediary’s financial advisors and consultants, providing assistance
in the ongoing education and training of a financial intermediary’s financial personnel, furnishing marketing support, maintaining
share balances and/or for sub-accounting, recordkeeping, administrative, shareholder or transaction processing services. Such payments
are in addition to any distribution fees, shareholder servicing fees and/or transfer agency fees that may be payable by the Funds.
The additional payments may be based on various factors, including level of sales (based on gross or net sales or some specified
minimum sales or some other similar criteria related to sales of the Funds and/or some or all other Eaton Vance funds), amount
of assets invested by the financial intermediary’s customers (which could include current or aged assets of the Funds and/or
some or all other Eaton Vance funds), a Fund’s advisory fee, some other agreed upon amount or other measures as determined
from time to time by the investment adviser and/or EVD. The amount of these payments may be different for different financial intermediaries.
The prospect of receiving, or the receipt of, additional compensation,
as described above, by financial intermediaries may provide such financial intermediaries and their financial advisors and other
salespersons with an incentive to favor sales of shares of the Funds over other investment options with respect to which these
financial intermediaries do not receive additional compensation (or receives lower levels of additional compensation). These payment
arrangements, however, will not change the price that an investor pays for shares of the Funds or the amount that the Funds receive
to invest on behalf of an investor. Investors may wish to take such payment arrangements into account when considering and evaluating
any recommendations relating to Fund shares and should review carefully any disclosures provided by financial intermediaries as
to their compensation.
Morgan Stanley Trading
and Principal Investing Activities. Notwithstanding anything to the contrary herein, Morgan Stanley will generally conduct
its sales and trading businesses, publish research and analysis, and render investment advice without regard for a Fund’s
holdings, although these activities could have an adverse impact on the value of one or more of the Fund’s investments, or
could cause Morgan Stanley to have an interest in one or more portfolio investments that is different from, and potentially adverse
to that of a Fund. Furthermore, from time to time, the investment adviser or its affiliates may invest “seed” capital
in a Fund, typically to enable the Fund to commence investment operations and/or achieve sufficient scale. The investment adviser
and its affiliates may hedge such seed capital exposure by investing in derivatives or other instruments expected to produce offsetting
exposure. Such hedging transactions, if any, would occur outside of a Fund.
Morgan Stanley’s sales and trading, financing and principal investing
businesses (whether or not specifically identified as such, and including Morgan Stanley’s trading and principal investing
businesses) will not be required to offer any investment opportunities to a Fund. These businesses may encompass, among other things,
principal trading activities as well as principal investing.
Morgan Stanley’s sales and trading, financing and principal investing
businesses have acquired or invested in, and in the future may acquire or invest in, minority and/or majority control positions
in equity or debt instruments of diverse public and/or private companies. Such activities may put Morgan Stanley in a position
to exercise contractual, voting or creditor rights, or management or other control with respect to securities or loans of portfolio
investments or other issuers, and in these instances Morgan Stanley may, in its discretion and subject to applicable law, act to
protect its own interests or interests of clients, and not a Fund’s interests.
Subject to the limitations of applicable law, a Fund may purchase from
or sell assets to, or make investments in, companies in which Morgan Stanley has or may acquire an interest, including as an owner,
creditor or counterparty.
Morgan Stanley’s
Investment Banking Activities. Morgan Stanley advises clients on a variety of mergers, acquisitions, restructuring, bankruptcy
and financing transactions. Morgan Stanley may act as an advisor to clients, including other investment funds that may compete
with a Fund and with respect to investments that a Fund may hold. Morgan Stanley may give advice and take action with respect to
any of its clients or proprietary accounts that may differ from the advice given, or may involve an action of a different timing
or nature than the action taken, by a Fund. Morgan Stanley may give advice and provide recommendations to persons competing with
a Fund and/or any of a Fund’s investments that are contrary to the Fund’s best interests and/or the best interests
of any of its investments.
Morgan Stanley could be engaged in financial advising, whether on the
buy-side or sell-side, or in financing or lending assignments that could result in Morgan Stanley’s determining in its discretion
or being required to act exclusively on behalf of one or more third parties, which could limit a Fund’s ability to transact
with respect to one or more existing or potential investments. Morgan Stanley may have relationships with third-party funds, companies
or investors who may have invested in or may look to invest in portfolio companies, and there could be conflicts between a Fund’s
best interests, on the one hand, and the interests of a Morgan Stanley client or counterparty, on the other hand.
To the extent that Morgan Stanley advises creditor or debtor companies
in the financial restructuring of companies either prior to or after filing for protection under Chapter 11 of the U.S. Bankruptcy
Code or similar laws in other jurisdictions, the investment adviser’s flexibility in making investments in such restructurings
on a Fund’s behalf may be limited. Morgan Stanley could provide investment banking services to competitors of portfolio companies,
as well as to private equity and/or private credit funds; such activities may present Morgan Stanley with a conflict of interest
vis-a-vis a Fund’s investment and may also result in a conflict in respect of the allocation of investment banking resources
to portfolio companies.
To the extent permitted by applicable law, Morgan Stanley may provide
a broad range of financial services to companies in which a Fund invests, including strategic and financial advisory services,
interim acquisition financing and other lending and underwriting or placement of securities, and Morgan Stanley generally will
be paid fees (that may include warrants or other securities) for such services. Morgan Stanley will not share any of the foregoing
interest, fees and other compensation received by it (including, for the avoidance of doubt, amounts received by the investment
adviser) with a Fund, and any advisory fees payable will not be reduced thereby.
Morgan Stanley may be engaged to act as a financial advisor to a company
in connection with the sale of such company, or subsidiaries or divisions thereof, may represent potential buyers of businesses
through its mergers and acquisition activities and may provide lending and other related financing services in connection with
such transactions. Morgan Stanley’s compensation for such activities is usually based upon realized consideration and is
usually contingent, in substantial part, upon the closing of the transaction. Under these circumstances, a Fund may be precluded
from participating in a transaction with or relating to the company being sold or participating in any financing activity related
to merger or acquisition.
To meet applicable regulatory requirements, there are periods when the
investment adviser will not engage in certain types of transactions in the securities of companies for which a broker-dealer affiliated
with Morgan Stanley is performing investment banking services. Fund shareholders will not receive notice of such instances. In
particular, when a broker-dealer affiliated with Morgan Stanley is engaged in an underwriting or other distribution of securities
of a company, the investment adviser may be prohibited from purchasing such securities on behalf of a Fund. In addition, under
certain circumstances, the investment adviser generally will not initiate transactions in the securities of companies with respect
to which affiliates of the investment adviser may have controlling interests or are affiliated.
The investment adviser believes that the nature and range of clients to
whom Morgan Stanley and its subsidiaries render investment banking and other services is such that it would be inadvisable to exclude
these companies from the Fund’s portfolio.
Morgan Stanley’s
Marketing Activities. Morgan Stanley is engaged in the business of underwriting, syndicating, brokering, administering,
servicing, arranging and advising on the distribution of a wide variety of securities and other investments in which a Fund may
invest. Subject to the restrictions of the 1940 Act, including Sections 10(f) and 17(e) thereof, a Fund may invest in transactions
in which Morgan Stanley acts as underwriter, placement agent, syndicator, broker, administrative agent, servicer, advisor, arranger
or structuring agent and receives fees or other compensation from the sponsors of such products or securities. Any fees earned
by Morgan Stanley in such capacity will not be shared with the investment adviser or the Funds. Certain conflicts of interest,
in addition to the receipt of fees or other compensation, would be inherent in these transactions. Moreover, the interests of one
of Morgan Stanley’s clients with respect to an issuer of securities in which a Fund has an investment may be adverse to the
investment adviser’s or a Fund’s best interests. In conducting the foregoing activities, Morgan Stanley will be acting
for its other clients and will have no obligation to act in the investment adviser’s or a Fund’s best interests.
Client Relationships.
Morgan Stanley has existing and potential relationships with a significant number of corporations, institutions and individuals.
In providing services to its clients, Morgan Stanley may face conflicts of interest with respect to activities recommended to or
performed for such clients, on the one hand, and a Fund, its shareholders or the entities in which the Fund invests, on the other
hand. In addition, these client relationships may present conflicts of interest in determining whether to offer certain investment
opportunities to a Fund.
In acting as principal or in providing advisory and other services to
its other clients, Morgan Stanley may engage in or recommend activities with respect to a particular matter that conflict with
or are different from activities engaged in or recommended by the investment adviser on a Fund’s behalf.
Principal Investments.
To the extent permitted by applicable law, there may be situations in which a Funds’ interests may conflict with the
interests of one or more general accounts of Morgan Stanley and its affiliates or accounts managed by Morgan Stanley or its affiliates.
This may occur because these accounts hold public and private debt and equity securities of many issuers which may be or become
portfolio companies, or from whom portfolio companies may be acquired.
Transactions with
Portfolio Companies of Affiliated Investment Accounts. The companies in which a Fund may invest may be counterparties to
or participants in agreements, transactions or other arrangements with portfolio companies or other entities of portfolio investments
of Affiliated Investment Accounts (for example, a company in which a Fund invests may retain a company in which an Affiliated Investment
Account invests to provide services or may acquire an asset from such company or vice versa). Certain of these agreements, transactions
and arrangements involve fees, servicing payments, rebates and/or other benefits to Morgan Stanley or its affiliates. For example,
portfolio entities may, including at the encouragement of Morgan Stanley, enter into agreements regarding group procurement and/or
vendor discounts. Morgan Stanley and its affiliates may also participate in these agreements and may realize better pricing or
discounts as a result of the participation of portfolio entities. To the extent permitted by applicable law, certain of these agreements
may provide for commissions or similar payments and/or discounts or rebates to be paid to a portfolio entity of an Affiliated Investment
Account, and such payments or discounts or rebates may also be made directly to Morgan Stanley or its affiliates. Under these arrangements,
a particular portfolio company or other entity may benefit to a greater degree than the other participants, and the funds, investment
vehicles and accounts (which may or may not include a Fund) that own an interest in such entity will receive a greater relative
benefit from the arrangements than the Eaton Vance funds, investment vehicles or accounts that do not own an interest therein.
Fees and compensation received by portfolio companies of Affiliated Investment Accounts in relation to the foregoing will not be shared with a Fund or offset advisory
fees payable.
Investments in Portfolio
Investments of Other Funds. To the extent permitted by applicable law, when a Fund invests in certain companies or other
entities, other funds affiliated with the investment adviser may have made or may be making an investment in such companies or
other entities. Other funds that have been or may be managed by the investment adviser may invest in the companies or other entities
in which a Fund has made an investment. Under such circumstances, a Fund and such other funds may have conflicts of interest (e.g.,
over the terms, exit strategies and related matters, including the exercise of remedies of their respective investments). If the
interests held by a Fund are different from (or take priority over) those held by such other funds, the investment adviser may
be required to make a selection at the time of conflicts between the interests held by such other funds and the interests held
by a Fund.
Allocation of Expenses.
Expenses may be incurred that are attributable to a Fund and one or more other Affiliated Investment Accounts (including in connection
with issuers in which a Fund and such other Affiliated Investment Accounts have overlapping investments). The allocation of such
expenses among such entities raises potential conflicts of interest. The investment adviser and its affiliates intend to allocate
such common expenses among a Fund and any such other Affiliated Investment Accounts on a pro rata basis or in such other manner
as the investment adviser deems to be fair and equitable or in such other manner as may be required by applicable law.
Temporary Investments.
To more efficiently invest short-term cash balances held by a Fund, the investment adviser may invest such balances on an
overnight “sweep” basis in shares of one or more money market funds or other short-term vehicles. It is anticipated
that the investment adviser to these money market funds or other short-term vehicles may be the investment adviser (or an affiliate)
to the extent permitted by applicable law, including Rule 12d1-1 under the 1940 Act. The Funds currently invests in Eaton Vance
Cash Reserves Fund, LLC (Cash Reserves Fund), an affiliated investment company managed by Eaton Vance, for this purpose. Eaton
Vance does not currently receive a fee for advisory services provided to Cash Reserves Fund.
Transactions with
Affiliates. The investment adviser and any investment sub-adviser might purchase securities from underwriters or placement
agents in which a Morgan Stanley affiliate is a member of a syndicate or selling group, as a result of which an affiliate might
benefit from the purchase through receipt of a fee or otherwise. Neither the investment adviser nor any investment sub-adviser
will purchase securities on behalf of a Fund from an affiliate that is acting as a manager of a syndicate or selling group. Purchases
by the investment adviser on behalf of a Fund from an affiliate acting as a placement agent must meet the requirements of applicable
law. Furthermore, Morgan Stanley may face conflicts of interest when the Funds use service providers affiliated with Morgan Stanley
because Morgan Stanley receives greater overall fees when they are used.
General Process for
Potential Conflicts. All of the transactions described above involve the potential for conflicts of interest between the
investment adviser, related persons of the investment adviser and/or their clients. The Advisers Act, the 1940 Act and ERISA impose
certain requirements designed to decrease the possibility of conflicts of interest between an investment adviser and its clients.
In some cases, transactions may be permitted subject to fulfillment of certain conditions. Certain other transactions may be prohibited.
In addition, the investment adviser has instituted policies and procedures designed to prevent conflicts of interest from arising
and, when they do arise, to ensure that it effects transactions for clients in a manner that is consistent with its fiduciary duty
to its clients and in accordance with applicable law. The investment adviser seeks to ensure that potential or actual conflicts
of interest are appropriately resolved taking into consideration the overriding best interests of the client.
EATON VANCE HIGH INCOME OPPORTUNITIES FUND
Supplement to Prospectus
dated March 1, 2021
1. The following replaces “Management”
under “Fund Summary”:
Management
Investment
Adviser. Boston Management and Research (“BMR”) serves as investment adviser to the Portfolio. Effective March
1, 2021, Eaton Vance Management (“Eaton Vance”) serves as investment adviser to the Fund.
Investment
Sub-Adviser. Eaton Vance Advisers International Ltd. (“EVAIL”).
Portfolio Managers
Kelley
Baccei, Vice President of Eaton Vance and BMR, has managed the Portfolio since November 2014 and the Fund since March 1,
2021.
Stephen
Concannon, Vice President of Eaton Vance and BMR, has managed the Portfolio since November 2014 and the Fund since March
1, 2021.
Jeffrey
Mueller, Vice President of EVAIL, has managed the Portfolio since June 2019 and the Fund since March 1, 2021.
2. The following replaces “Management.”
in “Management and Organization”:
Management.
The Fund’s investment adviser is Eaton Vance Management (“Eaton Vance”) and the Portfolio’s investment
adviser is Boston Management and Research (“BMR”). Each of Eaton Vance and BMR have offices at Two International Place,
Boston, MA 02110. Eaton Vance and BMR and their predecessor organizations have been managing assets since 1924 and managing
mutual funds since 1931. Prior to March 1, 2021, Eaton Vance was a wholly owned subsidiary and BMR was an indirect wholly owned
subsidiary of Eaton Vance Corp. (“EVC”).
On March 1, 2021, Morgan Stanley acquired EVC (the “Transaction”)
and Eaton Vance and BMR became indirect, wholly-owned subsidiaries of Morgan Stanley. In connection with the transaction,
the Portfolio entered into a new investment advisory agreement with BMR and BMR entered into a new investment sub-advisory agreement
with EVAIL. Each such agreement was approved by Portfolio interestholders prior to the consummation of the Transaction and was
effective upon its closing.
In addition, Fund shareholders have approved a new investment advisory
agreement with Eaton Vance and a new investment sub-advisory agreement with EVAIL that took effect upon the closing of the Transaction.
The new agreements for the Fund are substantially similar to the new investment advisory agreement and investment sub-advisory
agreement that were approved with respect to the Portfolio in connection with the Transaction. Under the Fund’s new investment
advisory agreement, Eaton Vance does not charge an advisory fee with respect to Fund assets invested in the Portfolio or any other
investment company for which Eaton Vance or its affiliates serve as investment adviser and receive an advisory fee. The Fund currently
invests all of its assets in the Portfolio. In the event Eaton Vance manages directly any assets of the Fund in the future, the
applicable advisory fee rate payable by the Fund will be the same as that payable by the Portfolio.
Morgan Stanley (NYSE: MS), whose principal offices are at
1585 Broadway, New York, New York 10036, is a preeminent global financial services firm engaged in securities trading and
brokerage activities, as well as providing investment banking, research and analysis, financing and financial advisory services.
As of December 31, 2020, after giving effect to the Transaction as described above, Morgan Stanley’s asset management operations
had aggregate assets under management of approximately $1.4 trillion.
The Fund is allocated its pro rata share of the advisory fee paid by the
Portfolio in which it invests, as applicable. Effective March 1, 2021, any fee reduction agreement previously applicable to the
Portfolio was incorporated into its new investment advisory agreement with its investment adviser and its new investment sub-advisory
agreement with its sub-adviser.
Pursuant to a sub-advisory agreement, the Fund’s and the Portfolio’s
advisers have delegated a portion of the investment management of the Fund and the Portfolio, respectively, to EVAIL, 125 Old Broad
Street, London, EC2N 1AR, United Kingdom, a registered investment adviser. Each of the Fund’s and the Portfolio’s adviser
pays EVAIL a portion of its advisory fee for sub-advisory services provided to the Fund and Portfolio. On March 1, 2021, upon the
closing of the Transaction, EVAIL became an indirect wholly owned subsidiary of Morgan Stanley. Prior to March 1, 2021, EVAIL was
an indirect wholly owned subsidiary of EVC.
The Fund’s semiannual report covering the fiscal period ended April
30 will provide information regarding the basis for the Trustees’ approval of the Fund’s and the Portfolio’s
investment advisory agreement and investment sub-advisory agreements.
High
Income Opportunities Fund. Under its investment advisory agreement with the Fund, Eaton Vance is entitled to receive an
advisory fee equal to the aggregate of a daily asset based fee and a daily income based fee. Asset-based fees are computed on total
daily net assets of the Fund that are not invested in other investment companies for which the Adviser or its affiliates (i) serves
as adviser and (ii) receives an advisory fee. Income-based fees are computed on total daily gross income of the Fund that is not
derived from other investment companies for which the Adviser or its affiliates (i) serves as adviser and (ii) receives an advisory
fee. The fees are applied on the basis of the following categories:
Category
|
Daily Net Assets
|
Annual
Fee Rate
|
Daily
Income Rate
|
1
|
Up to $500 million
|
0.300%
|
3.00%
|
2
|
$500 million but less than $1 billion
|
0.275%
|
2.75%
|
3
|
$1 billion but less than $1.5 billion
|
0.250%
|
2.50%
|
4
|
$1.5 billion but less than $2 billion
|
0.225%
|
2.25%
|
5
|
$2 billion but less than $3 billion
|
0.200%
|
2.00%
|
6
|
$3 billion and over
|
0.175%
|
1.75%
|
High
Income Opportunities Portfolio. Under its investment advisory agreement with the Portfolio, BMR receives a monthly advisory
fee equal to the aggregate of a daily asset based fee and a daily income based fee. The fees are applied on the basis of the following
categories and are payable monthly:
Category
|
Daily Net Assets
|
Annual
Fee Rate
|
Daily
Income Rate
|
1
|
Up to $500 million
|
0.300%
|
3.00%
|
2
|
$500 million but less than $1 billion
|
0.275%
|
2.75%
|
3
|
$1 billion but less than $1.5 billion
|
0.250%
|
2.50%
|
4
|
$1.5 billion but less than $2 billion
|
0.225%
|
2.25%
|
5
|
$2 billion but less than $3 billion
|
0.200%
|
2.00%
|
6
|
$3 billion and over
|
0.175%
|
1.75%
|
For the fiscal year ended October 31, 2020, the effective annual rate
of investment advisory fee paid to BMR, based on average daily net assets of the Portfolio was 0.46%.
Stephen Concannon, Kelley Baccei and Jeffrey Mueller manage the Fund and
the Portfolio. Mr. Concannon and Ms. Baccei have managed the Portfolio since November 2014 and the Fund since March 1, 2021. Mr.
Concannon and Ms. Baccei have each been a Vice President of Eaton Vance and BMR for more than five years and each manages other
Eaton Vance portfolios. Mr. Mueller has managed the Portfolio since June 2019 and the Fund since March 1, 2021 and is a Vice President
of EVAIL. Prior to November 1, 2017, Mr. Mueller held similar positions at Eaton Vance Management (International) Limited (“EVMI”)
from 2015-2017.
The SAI provides additional information
about each portfolio manager’s compensation, other accounts managed by each portfolio manager, and each portfolio manager’s
ownership of Fund shares.
Eaton Vance serves as the administrator of the Fund, providing the Fund
with administrative services and related office facilities. Eaton Vance does not currently receive a fee for serving as administrator.
Eaton Vance provides sub-transfer agency
and related services to Eaton Vance mutual funds pursuant to a Sub-Transfer Agency Support Services Agreement. For its services
under the agreement, Eaton Vance receives an aggregate fee from such funds equal to its actual expenses incurred in performing
such services.
3. The following replaces the
first paragraph under “Payments to Financial Intermediaries.” in “Purchasing Shares”:
Payments to Financial
Intermediaries. In addition to payments disclosed under “Sales Charges” below, the principal underwriter, out
of its own resources, may make cash payments to certain financial intermediaries (which may include affiliates of the principal
underwriter and investment adviser) who provide marketing support, transaction processing and/or administrative services and, in
some cases, include some or all Eaton Vance funds in preferred or specialized selling programs. Payments made by the principal underwriter to a financial intermediary
may be significant and are typically in the form of fees based on Fund sales, assets, transactions processed and/or accounts attributable
to that financial intermediary. Financial intermediaries also may receive amounts from the principal underwriter in connection
with educational or due diligence meetings that include information concerning Eaton Vance funds. The principal underwriter may
pay or allow other promotional incentives or payments to financial intermediaries to the extent permitted by applicable laws and
regulations.
4. The following replaces “Fund
Purchases through Edward D. Jones & Co., L.P. (“Edward Jones”)” under “Appendix A – Financial
Intermediary Sales Charge Variations”:
Policies Regarding Transactions Through Edward
D. Jones & Co., L.P. (“Edward Jones”)
The following information has been provided by Edward Jones:
Effective on or after March 1, 2021, the following information supersedes
prior information with respect to transactions and positions held in fund shares through an Edward Jones system. Clients of Edward
Jones (also referred to as “shareholders”) purchasing fund shares on the Edward Jones commission and fee-based platforms
are eligible only for the following sales charge discounts (also referred to as “breakpoints”) and waivers, which can
differ from discounts and waivers described elsewhere in the mutual fund prospectus or statement of additional information (“SAI”)
or through another broker-dealer. In all instances, it is the shareholder's responsibility to inform Edward Jones at the time of
purchase of any relationship, holdings of fund family or other facts qualifying the purchaser for discounts or waivers. Edward
Jones can ask for documentation from the shareholder of such circumstance. Shareholders should contact Edward Jones if they have
questions regarding their eligibility for these discounts and waivers.
Breakpoints
|
·
|
Breakpoint pricing, otherwise known as volume pricing, at dollar thresholds as described in the prospectus.
|
Rights of Accumulation (“ROA”)
|
·
|
The applicable sales charge on a purchase of Class A shares is determined by taking into account all share classes (except
certain money market funds and any assets held in group retirement plans) of the mutual fund family held by the shareholder or
in an account grouped by Edward Jones with other accounts for the purpose of providing certain pricing considerations (“pricing
groups”). If grouping assets as a shareholder, this includes all share classes held on the Edward Jones platform and/or held
on another platform. The inclusion of eligible fund family assets in the ROA calculation is dependent on the shareholder notifying
Edward Jones of such assets at the time of calculation. Money market funds are included only if such shares were sold with a sales
charge at the time of purchase or acquired in exchange for shares purchased with a sales charge.
|
|
·
|
The employer maintaining a SEP IRA plan and/or SIMPLE IRA plan may elect to establish or change ROA for the IRA accounts associated
with the plan to a plan-level grouping as opposed to including all share classes at a shareholder or pricing group level.
|
|
·
|
ROA is determined by calculating the higher of cost minus redemptions or market value (current shares x NAV).
|
Letter of Intent (“LOI”)
|
·
|
Through a LOI, shareholders can receive the sales charge and breakpoint discounts for purchases shareholders intend to make
over a 13-month period from the date Edward Jones receives the LOI. The LOI is determined by calculating the higher of cost or
market value of qualifying holdings at LOI initiation in combination with the value that the shareholder intends to buy over a
13-month period to calculate the front-end sales charge and any breakpoint discounts. Each purchase the shareholder makes during
that 13-month period will receive the sales charge and breakpoint discount that applies to the total amount. If during the 13-month
period the shareholder redeems any of the shares purchased pursuant to a LOI, the value of the redeemed shares will not be included
for purposes of satisfying the LOI. The inclusion of eligible fund family assets in the LOI calculation is dependent on the shareholder
notifying Edward Jones of such assets at the time of calculation. Purchases made before the LOI is received by Edward Jones are
not adjusted under the LOI and will not reduce the sales charge previously paid. Sales charges will be adjusted if LOI is not met.
|
|
·
|
If the employer maintaining a SEP IRA plan and/or SIMPLE IRA plan has elected to establish or change ROA for the IRA accounts
associated with the plan to a plan-level grouping, LOIs will also be at the plan-level and may only be established by the employer.
|
Front-end Sales Charge Waivers
Sales charges are waived for the following shareholders and
in the following situations:
|
·
|
Associates of Edward Jones and its affiliates and their family members who are in the same pricing group (as determined by
Edward Jones under its policies and procedures) as the associate. This waiver will continue for the remainder of the associate's
life if the associate retires from Edward Jones in good-standing and remains in good standing pursuant to Edward Jones' policies
and procedures.
|
|
·
|
Shares purchased in an Edward Jones fee-based program.
|
|
·
|
Shares purchased through reinvestment of capital gains distributions and dividend reinvestment.
|
|
·
|
Shares purchased from the proceeds of redeemed shares of the same fund family so long as the following conditions are met:
1) the proceeds are from the sale of shares within 60 days of the purchase, and 2) the sale and purchase are made in the same share
class and the same account or the purchase is made in an individual retirement account with proceeds from liquidations in a non-retirement
account.
|
|
·
|
Shares exchanged into Class A shares from another share class so long as the exchange is into the same fund and was initiated
at the discretion of Edward Jones. Edward Jones is responsible for any remaining Contingent Deferred Sales Charge (“CDSC”)
due to the fund company or its affiliate, if applicable. Any future purchases are subject to the applicable sales charge as disclosed
in the prospectus.
|
|
·
|
Exchanges from Class C shares to Class A shares of the same fund, generally, in the 84th month following the anniversary of
the purchase date or earlier at the discretion of Edward Jones.
|
CDSC Waivers
If the shareholder purchases shares that are subject to a CDSC
and those shares are redeemed before the CDSC is expired, the shareholder is responsible to pay the CDSC except in the following
conditions:
|
·
|
The death or disability of the shareholder.
|
|
·
|
Systematic withdrawals with up to 10% per year of the account value.
|
|
·
|
Return of excess contributions from an Individual Retirement Account (IRA).
|
|
·
|
Shares sold as part of a required minimum distribution for IRA and retirement accounts if the redemption is taken in or after
the year the shareholder reaches qualified age based on applicable IRS regulations.
|
|
·
|
Shares sold to pay Edward Jones fees or costs in such cases where the transaction is initiated by Edward Jones. Edward Jones
is responsible for any remaining CDSC due to the fund company or its affiliate, if applicable.
|
|
·
|
Shares exchanged in an Edward Jones fee-based program. Edward Jones is responsible for any remaining CDSC due to the fund company
or its affiliate, if applicable.
|
|
·
|
Shares acquired through NAV reinstatement.
|
|
·
|
Shares redeemed at the discretion of Edward Jones for Minimum Balances as described below.
|
******************************************************************************
Other Important Information Regarding Transactions Through Edward Jones
Minimum Purchase Amounts
|
·
|
Initial purchase minimum: $250
|
|
·
|
Subsequent purchase minimum: none
|
Minimum Balances
|
·
|
Edward Jones has the right to redeem at its discretion fund holdings with a balance of $250 or less. The following are examples
of accounts that are not included in this policy:
|
|
·
|
A fee-based account held on an Edward Jones platform
|
|
·
|
A 529 account held on an Edward Jones platform
|
|
·
|
An account with an active systematic investment plan or LOI
|
Exchanging Share Classes
At any time it deems necessary, Edward Jones has the authority to exchange
at NAV a shareholder's holdings in a fund to Class A shares of the same fund. Edward Jones is responsible for any remaining CDSC
due to the fund company or its affiliate, if applicable. Any future purchases are subject to the applicable sales charge as disclosed
in the prospectus.
March 1, 2021
|
37959 3.1.21
|
EATON VANCE HIGH INCOME OPPORTUNITIES FUND
Supplement to Statement
of Additional Information dated March 1, 2021
1. The following replaces the
first paragraph under “Fund Management.” in “Management and Organization”:
Fund Management.
The Trustees of the Trust are responsible for the overall management and supervision of the affairs
of the Trust. The Trustees of the Portfolio are responsible for the overall management and supervision of the Portfolio. The Board
members and officers of the Trust and Portfolio are listed below. Except as indicated, each individual has held the office shown
or other offices in the same company for the last five years. Board members hold indefinite terms of office. Each Trustee holds
office until his or her successor is elected and qualified, subject to a prior death, resignation, retirement, disqualification
or removal. Under the terms of the Fund’s and the Portfolio’s current Trustee retirement policy, an Independent
Trustee must retire and resign as a Trustee on the earlier of: (i) the first day of July following his or her 74th birthday; or
(ii), with limited exception, December 31st of the 20th year in which he or she has served as a Trustee. However, if such retirement
and resignation would cause the Fund or Portfolio to be out of compliance with Section 16 of the 1940 Act or any other regulations
or guidance of the SEC, then such retirement and resignation will not become effective until such time as action has been taken
for the Fund or Portfolio to be in compliance therewith. The “noninterested Trustees” consist of those Trustees
who are not “interested persons” of the Trust and the Portfolio, as that term is defined under the 1940 Act. The business
address of each Board member and officer is Two International Place, Boston, Massachusetts 02110. As used in this SAI, “EVC”
refers to Eaton Vance Corp., “EV” refers to Eaton Vance, Inc., “Eaton Vance” refers to Eaton Vance Management
and “EVD” refers to Eaton Vance Distributors, Inc. (see “Principal Underwriter” under “Other Service
Providers”). EV is the trustee of each of Eaton Vance and BMR. Effective March 1, 2021, each of Eaton Vance, BMR, EVD and
EV are indirect wholly-owned subsidiaries of Morgan Stanley. Each officer affiliated with Eaton Vance may hold a position with
other Eaton Vance affiliates that is comparable to his or her position with Eaton Vance listed below.
2. The following replaces the
Thomas E. Faust Jr. row in the Trustees table and in his biographical narrative in “Management and Organization”:
THOMAS E. FAUST JR.
1958
|
|
Trustee
|
|
Since 2007
|
|
Chairman of Morgan Stanley Investment Management, Inc. (MSIM), Director and President of EV, Chief Executive Officer and President of Eaton Vance and BMR, and Director of EVD. Formerly, Chairman, Chief Executive Officer and President of EVC. Trustee and/or officer of 141 registered investment companies. Mr. Faust is an interested person because of his positions with MSIM, BMR, Eaton Vance, EVD and EV, which are affiliates of the Trust and Portfolio, and his former position with EVC, which was an affiliate of the Trust prior to March 1, 2021.
|
|
141
|
|
Formerly, Director of EVC (2007-2021) and Hexavest Inc. (2012-2021) (investment management firm).
|
Thomas E. Faust
Jr. Mr. Faust has served as a member of the Eaton Vance Fund Boards since 2007. Effective March 1, 2021, he is Chairman
of MSIM. He is also Director and President of EV, Chief Executive Officer and President of Eaton Vance and BMR, and Director of
EVD. Mr. Faust previously served as Chairman and Chief Executive Officer of EVC from 2007 through March 1, 2021 and as President
of EVC from 2006 through March 1, 2021. Mr. Faust served as a Director of Hexavest Inc. from 2012-2021. From 2016 through 2019,
Mr. Faust served as a Director of SigFig Wealth Management LLC. Mr. Faust previously served as an equity analyst, portfolio manager,
Director of Equity Research and Management and Chief Investment Officer of Eaton Vance from 1985-2007. He holds B.S. degrees in
Mechanical Engineering and Economics from the Massachusetts Institute of Technology and an MBA from Harvard Business School. Mr.
Faust has been a Chartered Financial Analyst since 1988. He is a trustee and member of the executive committee of the Boston Symphony
Orchestra, Inc. and trustee emeritus of Wellesley College.
3. The following replaces the
first and second paragraphs under “Investment Advisory Services.” in “Investment Advisory and Administrative
Services”:
Investment Advisory
Services. As described in the Prospectus, upon the closing of the transaction by which Morgan Stanley acquired EVC (the
“Transaction”), the Fund and the Portfolio entered into a new investment advisory agreement with Eaton Vance or BMR,
as applicable, and Eaton Vance or BMR entered into a new investment sub-advisory agreement with EVAIL. Each investment adviser
manages the investments and affairs of the Portfolio and the Fund and provides related office facilities and personnel subject
to the supervision of the Trust's Board, in the case of the Fund, or the Portfolio’s Board. Each investment adviser and sub-adviser
furnishes investment research, advice and supervision, furnishes an investment program and determines what securities will be purchased,
held or sold by the Portfolio and the Fund and what portion, if any, of the Portfolio’s, and the Fund’s assets will
be held uninvested. Each Investment Advisory Agreement and Investment Sub-Advisory Agreement requires the investment adviser or
sub-adviser to pay the compensation and expenses of all officers and Trustees who are members of the investment adviser's or sub-adviser’s
organization and all personnel of the investment adviser or sub-adviser performing services relating to research and investment activities.
As described in the Prospectus, Eaton Vance serves as investment adviser
for the Fund effective March 1, 2021. For a description of the compensation that the Portfolio or the Fund pays the investment
adviser under its investment advisory agreement, see the Prospectus.
4. The following replaces the
last paragraph under “Investment Advisory Services.” in “Investment Advisory and Administrative Services”:
Each Investment Advisory Agreement and Investment Sub-Advisory Agreement
with the investment adviser or sub-adviser continues in effect through and including the second anniversary of its execution and
shall continue in full force and effect indefinitely thereafter, but only so long as such continuance after such second anniversary
is specifically approved at least annually (i) by the vote of a majority of the noninterested Trustees of the Trust, in the case
of the Fund, or the Portfolio, in the case of the Portfolio, cast in person at a meeting specifically called for the purpose of
voting on such approval and (ii) by the Board of the Trust, in the case of the Fund, or the Portfolio, in the case of the Portfolio,
or by vote of a majority of the outstanding voting securities of the Portfolio or Fund. Each Agreement may be terminated at any
time without penalty on sixty (60) days’ written notice by either party, or by vote of the majority of the outstanding voting
securities of the Portfolio or Fund, and each Agreement will terminate automatically in the event of its assignment. Each
Agreement provides that the investment adviser or sub-adviser may render services to others. Each Agreement also provides that
the investment adviser or sub-adviser shall not be liable for any loss incurred in connection with the performance of its duties,
or action taken or omitted under the Agreement, in the absence of willful misfeasance, bad faith, gross negligence or reckless
disregard of its obligations and duties thereunder, or for any losses sustained in the acquisition, holding or disposition of any
security or other investment. Each Agreement is not intended to, and does not, confer upon any person not a party to it any right,
benefit or remedy of any nature, except that the new sub-advisory agreement with EVAIL (as described above) states that the Fund
is a third party beneficiary of such agreement.
5. The following replaces “Information
About BMR and Eaton Vance.” in “Investment Advisory and Administrative Services”:
Information About
BMR and Eaton Vance. BMR and Eaton Vance are business trusts organized under the laws of the Commonwealth of Massachusetts.
EV serves as trustee of BMR and Eaton Vance. As described in the Prospectus, following the closing of the Transaction on March
1, 2021, EV, Eaton Vance and BMR became indirect wholly-owned subsidiaries of Morgan Stanley (NYSE: “MS”), a preeminent
global financial services firm engaged in securities trading and brokerage activities, as well as providing investment banking,
research and analysis, financing and financial advisory services.
Prior to March 1, 2021, EV and Eaton Vance were wholly-owned subsidiaries
of EVC, a Maryland corporation and publicly-held holding company and BMR was an indirect wholly owned subsidiary of EVC. EVC through
its subsidiaries and affiliates engaged primarily in investment management, administration and marketing activities. The Directors
of EVC were Thomas E. Faust Jr., Ann E. Berman, Leo I. Higdon, Jr., Paula A. Johnson, Brian D. Langstraat, Dorothy E. Puhy, Winthrop
H. Smith, Jr. and Richard A. Spillane, Jr. All shares of the outstanding Voting Common Stock of EVC were deposited in a Voting
Trust, the Voting Trustees of which were Mr. Faust, Paul W. Bouchey, Craig R. Brandon, Daniel C. Cataldo, Michael A. Cirami, Cynthia
J. Clemson, James H. Evans, Maureen A. Gemma, Laurie G. Hylton, Mr. Langstraat, Thomas Lee, Frederick S. Marius, David C. McCabe,
Edward J. Perkin, Lewis R. Piantedosi, Charles B. Reed, Craig P. Russ, Thomas C. Seto, John L. Shea, Eric A. Stein, John H. Streur,
Andrew N. Sveen, Payson F. Swaffield, R. Kelly Williams and Matthew J. Witkos (all of whom are or were officers of Eaton Vance
or its affiliates). The Voting Trustees had unrestricted voting rights for the election of Directors of EVC. Prior to March 1,
2021, all of the outstanding voting trust receipts issued under said Voting Trust were owned by certain of the officers of BMR
and Eaton Vance who may also have been officers, or officers and Directors of EVC and EV. As indicated under “Management
and Organization,” all of the officers of the Trust (as well as Mr. Faust who is also a Trustee) are employees of Eaton Vance
and/or BMR.
6. The following replaces “Information
About EVAIL.” in “Investment Advisory and Administrative Services”:
Information About
EVAIL. EVAIL provides investment advice to institutional clients and pooled investment vehicles. As described in the Prospectus,
following the closing of the Transaction on March 1, 2021, EVAIL became an indirect, wholly-owned subsidiary of Morgan Stanley.
Prior to March 1, 2021, EVAIL was an indirect wholly-owned subsidiary of EVC. EVAIL was originally organized in 2015.
7. The following replaces “Compensation
Structure for Eaton Vance, BMR and EVAIL.” and “Method to Determine Compensation.” under “Portfolio Managers.”
in “Investment Advisory and Administrative Services”:
Compensation Structure
for Eaton Vance, BMR and EVAIL. Compensation of the investment adviser's and sub-adviser's (collectively as used herein,
the “investment adviser”) portfolio managers and other investment professionals has the following primary components:
(1) a base salary, (2) an annual cash bonus, and (3) annual non-cash compensation consisting of restricted shares of Morgan Stanley
stock that are subject to a fixed vesting and distribution schedule. The investment adviser’s investment professionals also receive certain retirement,
insurance and other benefits that are broadly available to the investment adviser’s employees. Compensation of the investment
adviser’s investment professionals is reviewed primarily on an annual basis. Cash bonuses, stock-based compensation awards,
and adjustments in base salary are typically paid or put into effect at or shortly after the December 31st fiscal year end of Morgan
Stanley.
Method to Determine
Compensation. The investment adviser compensates its portfolio managers based primarily on the scale and complexity
of their portfolio responsibilities and the total return performance of managed funds and accounts versus the benchmark(s) stated
in the prospectus, as well as an appropriate peer group (as described below). In addition to rankings within peer groups of funds
on the basis of absolute performance, consideration may also be given to relative risk-adjusted performance. Risk-adjusted performance
measures include, but are not limited to, the Sharpe ratio, which uses standard deviation and excess return to determine reward
per unit of risk. Performance is normally based on periods ending on the September 30th preceding fiscal year end. Fund performance
is normally evaluated primarily versus peer groups of funds as determined by Lipper Inc. and/or Morningstar, Inc. When a fund’s
peer group as determined by Lipper or Morningstar is deemed by the investment adviser’s management not to provide a fair
comparison, performance may instead be evaluated primarily against a custom peer group or market index. In evaluating the performance
of a fund and its manager, primary emphasis is normally placed on three-year performance, with secondary consideration of performance
over longer and shorter periods. For funds that are tax-managed or otherwise have an objective of after-tax returns, performance
is measured net of taxes. For other funds, performance is evaluated on a pre-tax basis. For funds with an investment objective
other than total return (such as current income), consideration will also be given to the fund’s success in achieving its
objective. For managers responsible for multiple funds and accounts, investment performance is evaluated on an aggregate basis,
based on averages or weighted averages among managed funds and accounts. Funds and accounts that have performance-based advisory
fees are not accorded disproportionate weightings in measuring aggregate portfolio manager performance.
The compensation of portfolio managers with other job responsibilities (such
as heading an investment group or providing analytical support to other portfolios) will include consideration of the scope of
such responsibilities and the managers’ performance in meeting them.
The investment adviser seeks to compensate portfolio managers commensurate
with their responsibilities and performance, and competitive with other firms within the investment management industry. The investment
adviser participates in investment-industry compensation surveys and utilizes survey data as a factor in determining salary, bonus
and stock-based compensation levels for portfolio managers and other investment professionals. Salaries, bonuses and stock-based
compensation are also influenced by the operating performance of the investment adviser and Morgan Stanley. The overall annual
cash bonus pool is generally based on a substantially fixed percentage of pre-bonus adjusted operating income. While the salaries
of the investment adviser’s portfolio managers are comparatively fixed, cash bonuses and stock-based compensation may fluctuate
significantly from year to year, based on changes in manager performance and other factors as described herein. For a high performing
portfolio manager, cash bonuses and stock-based compensation may represent a substantial portion of total compensation.
8. The following replaces the
first two paragraphs in “Other Service Providers”:
Principal Underwriter.
Eaton Vance Distributors, Inc. (“EVD”), Two International Place, Boston, MA 02110 is
the principal underwriter of the Fund. The principal underwriter acts as principal in selling shares under a Distribution Agreement
with the Trust. The expenses of printing copies of prospectuses used to offer shares and other selling literature and of advertising
are borne by the principal underwriter. The fees and expenses of qualifying and registering and maintaining qualifications and
registrations of the Fund and its shares under federal and state securities laws are borne by the Fund. The Distribution Agreement
is renewable annually by the members of the Board (including a majority of the noninterested Trustees who have no direct or indirect
financial interest in the operation of the Distribution Agreement or any applicable Distribution Plan), may be terminated on sixty
days’ notice either by such Trustees or by vote of a majority of the outstanding Fund shares or on six months’ notice
by the principal underwriter and is automatically terminated upon assignment. The principal underwriter distributes shares on a
“best efforts” basis under which it is required to take and pay for only such shares as may be sold. Effective March
1, 2021, EVD is an indirect wholly-owned subsidiary of Morgan Stanley. Prior to March 1, 2021, EVD was a direct, wholly-owned subsidiary
of EVC. Mr. Faust is also a Director of EVD. EVD also serves as placement agent for the Portfolio, if applicable.
Custodian.
State Street Bank and Trust Company (“State Street”), State Street Financial Center,
One Lincoln Street, Boston, MA 02111, serves as custodian to the Fund and Portfolio, if applicable. State Street has custody of
all cash and securities representing the Fund’s interest in the Portfolio, has custody of the Portfolio’s and
the Fund's assets, maintains the general ledger of the Portfolio and the Fund and computes the daily net asset value of interests
in the Portfolio and the net asset value of shares of the Fund. In such capacity it attends to details in connection with the sale,
exchange, substitution, transfer or other dealings with the Fund's and the Portfolio’s investments, receives and disburses
all funds and performs various other ministerial duties upon receipt of proper instructions from the Trust and the Portfolio. State
Street also provides services in connection with the preparation of shareholder reports and the electronic filing of such reports
with the SEC.
9. The following replaces the
first, second, third, fifth, seventh and eighth paragraphs in “Portfolio Securities Transactions”:
Decisions concerning the execution of portfolio security transactions,
including the selection of the market and the broker-dealer firm or other financial intermediary (each an “intermediary”),
are made by the investment adviser. The Fund and Portfolio are responsible for the expenses associated with their portfolio transactions.
The investment adviser is also responsible for the execution of transactions for all other accounts managed by it. The investment
adviser places the portfolio security transactions for execution with one or more intermediaries firms. The investment adviser
uses its best efforts to obtain execution of portfolio security transactions at prices that, in the investment adviser’s
judgment, are advantageous to the client and at a reasonably competitive spread or (when a disclosed commission is being charged)
at reasonably competitive commission rates. In seeking such execution, the investment adviser will use its best judgment in evaluating
the terms of a transaction, and will give consideration to various relevant factors, which may include, without limitation, the
full range and quality of the intermediary’s services, responsiveness of the intermediary to the investment adviser, the
size and type of the transaction, the nature and character of the market for the security, the confidentiality, speed and certainty
of effective execution required for the transaction, the general execution and operational capabilities of the intermediary, the
reputation, reliability, experience and financial condition of the intermediary, the value and quality of the services rendered
by the intermediary in this and other transactions, and the amount of the spread or commission, if any. In addition, the investment
adviser may consider the receipt of Research Services (as defined below), provided it does not compromise the investment adviser’s
obligation to seek best overall execution for the Fund or Portfolio and is otherwise in compliance with applicable law. The investment
adviser may engage in portfolio transactions with an intermediary that sells shares of Eaton Vance funds, provided such transactions
are not directed to that intermediary as compensation for the promotion or sale of such shares.
As described in the Prospectus, following the closing of the Transaction
on March 1, 2021, the investment adviser became an “affiliated person,” as defined in the 1940 Act, of Morgan Stanley
and its affiliates, including certain intermediaries (as previously defined). As a result, the investment adviser is subject to
certain restrictions regarding transactions with Morgan Stanley-affiliated intermediaries, as set forth in the 1940 Act. Under
certain circumstances, such restrictions may limit the investment adviser’s ability to place portfolio transactions on behalf
of a Fund or Portfolio at the desired time or price. Any transaction the investment adviser enters into with a Morgan Stanley-affiliated
intermediary on behalf of a Fund or Portfolio will be done in compliance with applicable laws, rules, and regulations; will be
subject to any restrictions contained in a Fund’s or Portfolio’s investment advisory agreement; will be subject to
the investment adviser’s duty to seek best execution; and, will comply with any applicable policies and procedures of the
investment adviser, as described below.
Subject to the overriding objective of obtaining the best execution of
orders and applicable rules and regulations, as described above, a Fund or Portfolio may use an affiliated intermediary, including
a Morgan Stanley-affiliated intermediary, to effect Fund or Portfolio portfolio transactions, including transactions in futures
contracts and options on futures contracts, under procedures adopted by the Board. In order to use such affiliated intermediaries,
the Fund’s or Portfolio’s Board must approve and periodically review procedures reasonably designed to ensure that
commission rates and other remuneration paid to the affiliated intermediaries are fair and reasonable in comparison to those of
other intermediaries for comparable transactions involving similar securities being purchased or sold during a comparable time
period.
Pursuant to an order issued by the SEC, a Fund or Portfolio is permitted
to engage in principal transactions in money market instruments, subject to certain conditions, with Morgan Stanley & Co. LLC,
a broker-dealer affiliated with Morgan Stanley.
Transactions on stock exchanges and other agency transactions involve the
payment of negotiated brokerage commissions. Such commissions vary among different broker-dealer firms, and a particular broker-dealer
may charge different commissions according to such factors as the difficulty and size of the transaction and the volume of business
done with such broker-dealer. Transactions in foreign securities often involve the payment of brokerage commissions, which may
be higher than those in the United States. There is generally no stated commission in the case of securities traded in the over-the-counter
markets including transactions in fixed-income securities which are generally purchased and sold on a net basis (i.e., without
commission) through intermediaries and banks acting for their own account rather than as brokers. Such intermediaries attempt to
profit from such transactions by buying at the bid price and selling at the higher asked price of the market for such obligations,
and the difference between the bid and asked price is customarily referred to as the spread. Fixed-income transactions may also
be transacted directly with the issuer of the obligations. In an underwritten offering the price paid often includes a disclosed
fixed commission or discount retained by the underwriter or dealer. Although spreads or commissions paid on portfolio security
transactions will, in the judgment of the investment adviser, be reasonable in relation to the value of the services provided,
commissions exceeding those which another firm might charge may be paid to intermediaries who were selected to execute transactions
on behalf of the investment adviser’s clients in part for providing brokerage and research services to the investment adviser
as permitted by applicable law.
Municipal obligations, including state obligations, purchased and sold by
the Fund or Portfolio are generally traded in the over-the-counter market on a net basis (i.e., without commission) through intermediaries
acting for their own account rather than as brokers, or otherwise involve transactions directly with the issuer of such obligations.
Such intermediaries attempt to profit from such transactions by buying at the bid price and selling at the higher asked price of
the market for such obligations, and the difference between the bid and asked price is customarily referred to as the spread. The
Fund or Portfolio may also purchase municipal obligations from underwriters, and dealers in fixed-price offerings, the cost of
which may include undisclosed fees and concessions to the underwriters. On occasion it may be necessary or appropriate to purchase
or sell a security through a broker on an agency basis, in which case the Fund or Portfolio will incur a brokerage commission.
Although spreads or commissions on portfolio security transactions will, in the judgment of the investment adviser, be reasonable
in relation to the value of the services provided, spreads or commissions exceeding those which another firm might charge may be
paid to intermediaries who were selected to execute transactions on behalf of the Fund or Portfolio and the investment adviser’s
other clients for providing brokerage and research services to the investment adviser as permitted by applicable law.
Research Services provided by (and produced by) broker-dealers that execute
portfolio transactions or from affiliates of executing broker-dealers are referred to as “Proprietary Research.” Except
for trades executed in jurisdictions where such consideration is not permissible, the investment adviser may and does consider
the receipt of Proprietary Research Services as a factor in selecting broker dealers to execute client portfolio transactions,
provided it does not compromise the investment adviser’s obligation to seek best overall execution. In jurisdictions where
permissible, the investment adviser also may consider the receipt of Research Services under so called “client commission
arrangements” or “commission sharing arrangements” (both referred to as “CCAs”) as a factor in selecting
broker dealers to execute transactions, provided it does not compromise the investment adviser’s obligation to seek best
overall execution. Under a CCA arrangement, the investment adviser may cause client accounts to effect transactions through a broker-dealer
and request that the broker-dealer allocate a portion of the commissions paid on those transactions to a pool of commission credits
that are paid to other firms that provide Research Services to the investment adviser. Under a CCA, the broker-dealer that provides
the Research Services need not execute the trade. Participating in CCAs may enable the investment adviser to consolidate payments
for research using accumulated client commission credits from transactions executed through a particular broker-dealer to periodically
pay for Research Services obtained from and provided by other firms, including other broker-dealers that supply Research Services.
The investment adviser believes that CCAs offer the potential to optimize the execution of trades and the acquisition of a variety
of high quality Research Services that the investment adviser might not be provided access to absent CCAs. The investment adviser
may enter into CCA arrangements with a number of broker-dealers and other firms, including certain affiliates of the investment
adviser. The investment adviser will only enter into and utilize CCAs to the extent permitted by Section 28(e) and other applicable
law.
The investment companies sponsored by the investment adviser or certain
of its affiliates also may allocate brokerage commissions to acquire information relating to the
performance, fees and expenses of such companies and other investment companies, which information is used by the members
of the Board of such companies to fulfill their responsibility to oversee the quality of the services provided to various entities,
including the investment adviser, to such companies. Such companies may also pay cash for such information.
Securities considered as investments for
the Fund and Portfolio may also be appropriate for other investment accounts managed by the investment adviser or certain of its
affiliates. Whenever decisions are made to buy or sell securities by the Fund or Portfolio and one or more of such other accounts
simultaneously, the investment adviser will allocate the security transactions (including “new” issues) in a manner
which it believes to be equitable under the circumstances. As a result of such allocations, there may be instances where the Fund
or Portfolio will not participate in a transaction that is allocated among other accounts. If an aggregated order cannot be filled
completely, allocations will generally be made on a pro rata basis. An order may not be allocated on a pro rata basis where, for
example: (i) consideration is given to portfolio managers who have been instrumental in developing or negotiating a particular
investment; (ii) consideration is given to an account with specialized investment policies that coincide with the particulars of
a specific investment; (iii) pro rata allocation would result in odd-lot or de minimis amounts being allocated to a portfolio or
other client; or (iv) where the investment adviser reasonably determines that departure from a pro rata allocation is advisable.
While these aggregation and allocation policies could have a detrimental effect on the price or amount of the securities available
to the Fund or Portfolio from time to time, it is the opinion of the members of the Board that the benefits from the investment
adviser organization outweigh any disadvantage that may arise from exposure to simultaneous transactions.
10. The following is added as
a new section immediately prior to “Financial Statements”:
POTENTIAL CONFLICTS OF INTEREST
As a diversified global financial services firm, Morgan Stanley engages
in a broad spectrum of activities, including financial advisory services, investment management activities, lending, commercial
banking, sponsoring and managing private investment funds, engaging in broker-dealer transactions and principal securities, commodities
and foreign exchange transactions, research publication and other activities. In the ordinary course of its business, Morgan Stanley
is a full-service investment banking and financial services firm and therefore engages in
activities where Morgan Stanley’s interests or the interests of its clients may conflict with the interests of a Fund or
Portfolio, if applicable, (collectively for the purposes of
this section, “Fund” or “Funds”). Morgan Stanley
advises clients and sponsors, manages or advises other investment funds and investment programs, accounts and businesses (collectively,
together with the Funds, any new or successor funds, programs, accounts or businesses, the ‘‘Affiliated Investment
Accounts’’) with a wide variety of investment objectives that in some instances may overlap or conflict with a Fund’s
investment objectives and present conflicts of interest. In addition, Morgan Stanley may also from time to time create new or successor
Affiliated Investment Accounts that may compete with a Fund and present similar conflicts of interest. The discussion below enumerates
certain actual, apparent and potential conflicts of interest. There is no assurance that conflicts of interest will be resolved
in favor of Fund shareholders and, in fact, they may not be. Conflicts of interest not described below may also exist.
Material Non-public
and Other Information. It is expected that confidential or material non-public information regarding an investment or potential
investment opportunity may become available to the investment adviser. If such information becomes available, the investment adviser
may be precluded (including by applicable law or internal policies or procedures) from pursuing an investment or disposition opportunity
with respect to such investment or investment opportunity.
The investment adviser may also from time to time be subject to contractual
‘‘stand-still’’ obligations and/or confidentiality obligations that may restrict its ability to trade in
certain investments on a Fund’s behalf. In addition, the investment adviser may be precluded from disclosing such information
to an investment team, even in circumstances in which the information would be beneficial if disclosed. Therefore, the investment
team may not be provided access to material non-public information in the possession of Morgan Stanley that might be relevant to
an investment decision to be made on behalf of a Fund, and the investment team may initiate a transaction or sell an investment
that, if such information had been known to it, may not have been undertaken. In addition, certain members of the investment team
may be recused from certain investment-related discussions so that such members do not receive information that would limit their
ability to perform functions of their employment with the investment adviser or its affiliates unrelated to that of a Fund. Furthermore,
access to certain parts of Morgan Stanley may be subject to third party confidentiality obligations and to information barriers
established by Morgan Stanley in order to manage potential conflicts of interest and regulatory restrictions, including without
limitation joint transaction restrictions pursuant to the 1940 Act. Accordingly, the investment adviser’s ability to source
investments from other business units within Morgan Stanley may be limited and there can be no assurance that the investment adviser
will be able to source any investments from any one or more parts of the Morgan Stanley network.
The investment adviser may restrict its investment decisions and activities
on behalf of the Funds in various circumstances, including because of applicable regulatory requirements or information held by
the investment adviser or Morgan Stanley. The investment adviser might not engage in transactions or other activities for, or enforce
certain rights in favor of, a Fund due to Morgan Stanley’s activities outside the Funds. In instances where trading of an
investment is restricted, the investment adviser may not be able to purchase or sell such investment on behalf of a Fund, resulting
in the Fund’s inability to participate in certain desirable transactions. This inability to buy or sell an investment could
have an adverse effect on a Fund’s portfolio due to, among other things, changes in an investment’s value during the
period its trading is restricted. Also, in situations where the investment adviser is required to aggregate its positions with
those of other Morgan Stanley business units for position limit calculations, the investment adviser may have to refrain from making
investments due to the positions held by other Morgan Stanley business units or their clients. There may be other situations where
the investment adviser refrains from making an investment due to additional disclosure obligations, regulatory requirements, policies,
and reputational risk, or the investment adviser may limit purchases or sales of securities in respect of which Morgan Stanley
is engaged in an underwriting or other distribution capacity.
Morgan Stanley has established certain information barriers and other
policies to address the sharing of information between different businesses within Morgan Stanley. As a result of information barriers,
the investment adviser generally will not have access, or will have limited access, to certain information and personnel in other
areas of Morgan Stanley relating to business transactions for clients (including transactions in investing, banking, prime brokerage
and certain other areas), and generally will not manage the Funds with the benefit of the information held by such other areas.
Morgan Stanley, due to its access to and knowledge of funds, markets and securities based on its prime brokerage and other businesses,
may make decisions based on information or take (or refrain from taking) actions with respect to interests in investments of the
kind held (directly or indirectly) by the Funds in a manner that may be adverse to the Funds, and will not have any obligation
or other duty to share information with the investment adviser.
In limited circumstances, however, including for purposes of managing
business and reputational risk, and subject to policies and procedures, Morgan Stanley personnel, including personnel of the investment
adviser, on one side of an information barrier may have access to information and personnel on the other side of the information
barrier through “wall crossings.” The investment adviser faces conflicts of interest in determining whether to engage
in such wall crossings. Information obtained in connection with such wall crossings may limit or restrict the ability of the investment
adviser to engage in or otherwise effect transactions on behalf of the Funds (including purchasing or selling securities that the
investment adviser
that arise because of the foregoing, the investment adviser generally will be subject
to fiduciary requirements. The investment adviser may also implement internal information barriers or ethical walls, and the conflicts
described herein with respect to information barriers and otherwise with respect to Morgan Stanley and the investment adviser will
also apply internally within the investment adviser. As a result, a Fund may not be permitted to transact in (e.g., dispose of
a security in whole or in part) during periods when it otherwise would have been able to do so, which could adversely affect a
Fund. Other investors in the security that are not subject to such restrictions may be able to transact in the security during
such periods. There may also be circumstances in which, as a result of information held by certain portfolio management teams in
the investment adviser, the investment adviser limits an activity or transaction for a Fund, including if the Fund is managed by
a portfolio management team other than the team holding such information.
Investments by Morgan
Stanley and its Affiliated Investment Accounts. In serving in multiple capacities to Affiliated Investment Accounts, Morgan
Stanley, including the investment adviser and its investment teams, may have obligations to other clients or investors in Affiliated
Investment Accounts, the fulfillment of which may not be in the best interests of a Fund or its shareholders. A Fund’s investment
objectives may overlap with the investment objectives of certain Affiliated Investment Accounts. As a result, the members of an
investment team may face conflicts in the allocation of suitable investment opportunities among a Fund and other investment funds,
programs, accounts and businesses advised by or affiliated with the investment adviser. Certain Affiliated Investment Accounts
may provide for higher management or incentive fees or greater expense reimbursements or overhead allocations, all of which may
contribute to this conflict of interest and create an incentive for the investment adviser to favor such other accounts.
Morgan Stanley currently invests and plans to continue to invest on its
own behalf and on behalf of its Affiliated Investment Accounts in a wide variety of investment opportunities globally. Morgan Stanley
and its Affiliated Investment Accounts, to the extent consistent with applicable law and policies and procedures, will be permitted
to invest in investment opportunities without making such opportunities available to a Fund beforehand. Subject to the foregoing,
Morgan Stanley may offer investments that fall into the investment objectives of an Affiliated Investment Account to such account
or make such investment on its own behalf, even though such investment also falls within a Fund’s investment objectives.
A Fund may invest in opportunities that Morgan Stanley and/or one or more Affiliated Investment Accounts has declined, and vice
versa. All of the foregoing may reduce the number of investment opportunities available to a Fund and may create conflicts of interest
in allocating investment opportunities. Investors should note that the conflicts inherent in making such allocation decisions may
not always be resolved to a Fund’s advantage. There can be no assurance that a Fund will have an opportunity to participate
in certain opportunities that fall within their investment objectives.
To seek to reduce potential conflicts of interest and to attempt to allocate
such investment opportunities in a fair and equitable manner, the investment adviser has implemented allocation policies and procedures.
These policies and procedures are intended to give all clients of the investment adviser, including the Funds, fair access to investment
opportunities consistent with the requirements of organizational documents, investment strategies, applicable laws and regulations,
and the fiduciary duties of the investment adviser. Each client of the investment adviser that is subject to the allocation policies
and procedures, including each Fund, is assigned an investment team and portfolio manager(s) by the investment adviser. The investment
team and portfolio managers review investment opportunities and will decide with respect to the allocation of each opportunity
considering various factors and in accordance with the allocation policies and procedures. The allocation policies and procedures
are subject to change. Investors should note that the conflicts inherent in making such allocation decisions may not always be
resolved to the advantage of a Fund.
It is possible that Morgan Stanley or an Affiliated Investment Account,
including another Eaton Vance fund, will invest in or advise a company that is or becomes a competitor of a company of which a
Fund holds an investment. Such investment could create a conflict between the Fund, on the one hand, and Morgan Stanley or the
Affiliated Investment Account, on the other hand. In such a situation, Morgan Stanley may also have a conflict in the allocation
of its own resources to the portfolio investment. Furthermore, certain Affiliated Investment Accounts will be focused primarily
on investing in other funds which may have strategies that overlap and/or directly conflict and compete with a Fund.
In addition, certain investment professionals who are involved in a Fund’s
activities remain responsible for the investment activities of other Affiliated Investment Accounts managed by the investment adviser
and its affiliates, and they will devote time to the management of such investments and other newly created Affiliated Investment
Accounts (whether in the form of funds, separate accounts or other vehicles), as well as their own investments. In addition, in
connection with the management of investments for other Affiliated Investment Accounts, members of Morgan Stanley and its affiliates
may serve on the boards of directors of or advise companies which may compete with a Fund’s portfolio investments. Moreover,
these Affiliated Investment Accounts managed by Morgan Stanley and its affiliates may pursue investment opportunities that may
also be suitable for a Fund.
It should be noted that Morgan Stanley may, directly or indirectly, make
large investments in certain of its Affiliated Investment Accounts, and accordingly Morgan Stanley’s investment in a Fund
may not be a determining factor in the outcome of any of the foregoing conflicts. Nothing herein restricts or in any way limits
the activities of Morgan Stanley, including its ability to buy or sell interests in, or provide financing to, equity and/or debt
instruments, funds or portfolio companies, for its own accounts or for the accounts of Affiliated Investment Accounts or other
investment funds or clients in accordance with applicable law.
Different clients of the investment adviser, including a Fund, may invest
in different classes of securities of the same issuer, depending on the respective clients’ investment objectives and policies.
As a result, the investment adviser and its affiliates, at times, will seek to satisfy fiduciary obligations to certain clients
owning one class of securities of a particular issuer by pursuing or enforcing rights on behalf of those clients with respect to
such class of securities, and those activities may have an adverse effect on another client which owns a different class of securities
of such issuer. For example, if one client holds debt securities of an issuer and another client holds equity securities of the
same issuer, if the issuer experiences financial or operational challenges, the investment adviser and its affiliates may seek
a liquidation of the issuer on behalf of the client that holds the debt securities, whereas the client holding the equity securities
may benefit from a reorganization of the issuer. Thus, in such situations, the actions taken by the investment adviser or its affiliates
on behalf of one client can negatively impact securities held by another client. These conflicts also exist as between the investment
adviser’s clients, including the Funds, and the Affiliated Investment Accounts managed by Morgan Stanley.
The investment adviser and its affiliates may give advice and recommend
securities to other clients which may differ from advice given to, or securities recommended or bought for, a Fund even though
such other clients’ investment objectives may be similar to those of the Fund.
The investment adviser and its affiliates manage long and short portfolios.
The simultaneous management of long and short portfolios creates conflicts of interest in portfolio management and trading in that
opposite directional positions may be taken in client accounts managed by the same investment team, and creates risks such as:
(i) the risk that short sale activity could adversely affect the market value of long positions in one or more portfolios (and
vice versa) and (ii) the risks associated with the trading desk receiving opposing orders in the same security simultaneously.
The investment adviser and its affiliates have adopted policies and procedures that are reasonably designed to mitigate these conflicts.
In certain circumstances, the investment adviser invest on behalf of itself in securities and other instruments that would be appropriate
for, held by, or may fall within the investment guidelines of its clients, including a Fund. At times, the investment adviser will
give advice or take action for its own accounts that differs from, conflicts with, or is adverse to advice given or action taken
for any client.
From time to time, conflicts also arise due to the fact that certain securities
or instruments maybe held in some client accounts, including a Fund, but not in others, or the client accounts may have different
levels of holdings in certain securities or instruments, and because the accounts pay different levels of fees to the investment
adviser. In addition, at times an investment adviser investment team will give advice or take action with respect to the investments
of one or more clients that is not given or taken with respect to other clients with similar investment programs, objectives, and
strategies. Accordingly, clients with similar strategies will not always hold the same securities or instruments or achieve the
same performance. The investment adviser’s investment teams also advise clients with conflicting programs, objectives or
strategies. These conflicts also exist as between the investment adviser’s clients, including the Funds, and the Affiliated
Investment Accounts managed by Morgan Stanley.
The investment adviser maintains separate trading desks by investment
team and generally based on asset class, including two trading desks trading equity securities. These trading desks operate independently
of one another. The two equity trading desks do not share information. The separate equity trading desks may result in one desk
competing against the other desk when implementing buy and sell transactions, possibly causing certain accounts to pay more or
receive less for a security than other accounts. In addition, Morgan Stanley and its affiliates maintain separate trading desks
that operate independently of each other and do not share information with the investment adviser. The Morgan Stanley and affiliate
trading desks may compete against the investment adviser trading desks when implementing buy and sell transactions, possibly causing
certain Affiliated Investment Accounts to pay more or receive less for a security than other Affiliated Investment Accounts.
Payments to Broker-Dealers
and Other Financial Intermediaries. The investment adviser and/or EVD may pay compensation, out of their own funds and not
as an expense of the Funds, to certain financial intermediaries (which may include affiliates of the investment adviser and EVD),
including recordkeepers and administrators of various deferred compensation plans, in connection with the sale, distribution, marketing
and retention of shares of the Funds and/or shareholder servicing. For example, the investment adviser or EVD may pay additional
compensation to a financial intermediary for, among other things, promoting the sale and distribution of Fund shares, providing
access to various programs, mutual fund platforms or preferred or recommended mutual fund lists that may be offered by a financial
intermediary, granting EVD access to a financial intermediary’s financial advisors and consultants, providing assistance
in the ongoing education and training of a financial intermediary’s financial personnel, furnishing marketing support, maintaining
share balances and/or for sub-accounting, recordkeeping, administrative,
shareholder or transaction processing services. Such payments are in addition to any distribution fees, shareholder servicing fees
and/or transfer agency fees that may be payable by the Funds. The additional payments may be based on various factors, including
level of sales (based on gross or net sales or some specified minimum sales or some other similar criteria related to sales of
the Funds and/or some or all other Eaton Vance funds), amount of assets invested by the financial intermediary’s customers
(which could include current or aged assets of the Funds and/or some or all other Eaton Vance funds), a Fund’s advisory fee,
some other agreed upon amount or other measures as determined from time to time by the investment adviser and/or EVD. The amount
of these payments may be different for different financial intermediaries.
The prospect of receiving, or the receipt of, additional compensation,
as described above, by financial intermediaries may provide such financial intermediaries and their financial advisors and other
salespersons with an incentive to favor sales of shares of the Funds over other investment options with respect to which these
financial intermediaries do not receive additional compensation (or receives lower levels of additional compensation). These payment
arrangements, however, will not change the price that an investor pays for shares of the Funds or the amount that the Funds receive
to invest on behalf of an investor. Investors may wish to take such payment arrangements into account when considering and evaluating
any recommendations relating to Fund shares and should review carefully any disclosures provided by financial intermediaries as
to their compensation.
Morgan Stanley Trading
and Principal Investing Activities. Notwithstanding anything to the contrary herein, Morgan Stanley will generally conduct
its sales and trading businesses, publish research and analysis, and render investment advice without regard for a Fund’s
holdings, although these activities could have an adverse impact on the value of one or more of the Fund’s investments, or
could cause Morgan Stanley to have an interest in one or more portfolio investments that is different from, and potentially adverse
to that of a Fund. Furthermore, from time to time, the investment adviser or its affiliates may invest “seed” capital
in a Fund, typically to enable the Fund to commence investment operations and/or achieve sufficient scale. The investment adviser
and its affiliates may hedge such seed capital exposure by investing in derivatives or other instruments expected to produce offsetting
exposure. Such hedging transactions, if any, would occur outside of a Fund.
Morgan Stanley’s sales and trading, financing and principal investing
businesses (whether or not specifically identified as such, and including Morgan Stanley’s trading and principal investing
businesses) will not be required to offer any investment opportunities to a Fund. These businesses may encompass, among other things,
principal trading activities as well as principal investing.
Morgan Stanley’s sales and trading, financing and principal investing
businesses have acquired or invested in, and in the future may acquire or invest in, minority and/or majority control positions
in equity or debt instruments of diverse public and/or private companies. Such activities may put Morgan Stanley in a position
to exercise contractual, voting or creditor rights, or management or other control with respect to securities or loans of portfolio
investments or other issuers, and in these instances Morgan Stanley may, in its discretion and subject to applicable law, act to
protect its own interests or interests of clients, and not a Fund’s interests.
Subject to the limitations of applicable law, a Fund may purchase from
or sell assets to, or make investments in, companies in which Morgan Stanley has or may acquire an interest, including as an owner,
creditor or counterparty.
Morgan Stanley’s
Investment Banking Activities. Morgan Stanley advises clients on a variety of mergers, acquisitions, restructuring, bankruptcy
and financing transactions. Morgan Stanley may act as an advisor to clients, including other investment funds that may compete
with a Fund and with respect to investments that a Fund may hold. Morgan Stanley may give advice and take action with respect to
any of its clients or proprietary accounts that may differ from the advice given, or may involve an action of a different timing
or nature than the action taken, by a Fund. Morgan Stanley may give advice and provide recommendations to persons competing with
a Fund and/or any of a Fund’s investments that are contrary to the Fund’s best interests and/or the best interests
of any of its investments.
Morgan Stanley could be engaged in financial advising, whether on the
buy-side or sell-side, or in financing or lending assignments that could result in Morgan Stanley’s determining in its discretion
or being required to act exclusively on behalf of one or more third parties, which could limit a Fund’s ability to transact
with respect to one or more existing or potential investments. Morgan Stanley may have relationships with third-party funds, companies
or investors who may have invested in or may look to invest in portfolio companies, and there could be conflicts between a Fund’s
best interests, on the one hand, and the interests of a Morgan Stanley client or counterparty, on the other hand.
To the extent that Morgan Stanley advises creditor or debtor companies
in the financial restructuring of companies either prior to or after filing for protection under Chapter 11 of the U.S. Bankruptcy
Code or similar laws in other jurisdictions, the investment adviser’s flexibility in making investments in such restructurings
on a Fund’s behalf may be limited. Morgan Stanley could provide investment banking services to competitors of portfolio companies,
as well as to private equity and/or private credit funds; such activities may present Morgan Stanley with a conflict of interest
vis-a-vis a Fund’s investment and may also result in a conflict in respect of the allocation of investment banking resources
to portfolio companies.
To the extent permitted by applicable law, Morgan Stanley may provide
a broad range of financial services to companies in which a Fund invests, including strategic and financial advisory services,
interim acquisition financing and other lending and underwriting or placement of securities, and Morgan Stanley generally will
be paid fees (that may include warrants or other securities) for such services. Morgan Stanley will not share any of the foregoing
interest, fees and other compensation received by it (including, for the avoidance of doubt, amounts received by the investment
adviser) with a Fund, and any advisory fees payable will not be reduced thereby.
Morgan Stanley may be engaged to act as a financial advisor to a company
in connection with the sale of such company, or subsidiaries or divisions thereof, may represent potential buyers of businesses
through its mergers and acquisition activities and may provide lending and other related financing services in connection with
such transactions. Morgan Stanley’s compensation for such activities is usually based upon realized consideration and is
usually contingent, in substantial part, upon the closing of the transaction. Under these circumstances, a Fund may be precluded
from participating in a transaction with or relating to the company being sold or participating in any financing activity related
to merger or acquisition.
To meet applicable regulatory requirements, there are periods when the
investment adviser will not engage in certain types of transactions in the securities of companies for which a broker-dealer affiliated
with Morgan Stanley is performing investment banking services. Fund shareholders will not receive notice of such instances. In
particular, when a broker-dealer affiliated with Morgan Stanley is engaged in an underwriting or other distribution of securities
of a company, the investment adviser may be prohibited from purchasing such securities on behalf of a Fund. In addition, under
certain circumstances, the investment adviser generally will not initiate transactions in the securities of companies with respect
to which affiliates of the investment adviser may have controlling interests or are affiliated.
The investment adviser believes that the nature and range of clients to
whom Morgan Stanley and its subsidiaries render investment banking and other services is such that it would be inadvisable to exclude
these companies from the Fund’s portfolio.
Morgan Stanley’s
Marketing Activities. Morgan Stanley is engaged in the business of underwriting, syndicating, brokering, administering,
servicing, arranging and advising on the distribution of a wide variety of securities and other investments in which a Fund may
invest. Subject to the restrictions of the 1940 Act, including Sections 10(f) and 17(e) thereof, a Fund may invest in transactions
in which Morgan Stanley acts as underwriter, placement agent, syndicator, broker, administrative agent, servicer, advisor, arranger
or structuring agent and receives fees or other compensation from the sponsors of such products or securities. Any fees earned
by Morgan Stanley in such capacity will not be shared with the investment adviser or the Funds. Certain conflicts of interest,
in addition to the receipt of fees or other compensation, would be inherent in these transactions. Moreover, the interests of one
of Morgan Stanley’s clients with respect to an issuer of securities in which a Fund has an investment may be adverse to the
investment adviser’s or a Fund’s best interests. In conducting the foregoing activities, Morgan Stanley will be acting
for its other clients and will have no obligation to act in the investment adviser’s or a Fund’s best interests.
Client Relationships.
Morgan Stanley has existing and potential relationships with a significant number of corporations, institutions and individuals.
In providing services to its clients, Morgan Stanley may face conflicts of interest with respect to activities recommended to or
performed for such clients, on the one hand, and a Fund, its shareholders or the entities in which the Fund invests, on the other
hand. In addition, these client relationships may present conflicts of interest in determining whether to offer certain investment
opportunities to a Fund.
In acting as principal or in providing advisory and other services to
its other clients, Morgan Stanley may engage in or recommend activities with respect to a particular matter that conflict with
or are different from activities engaged in or recommended by the investment adviser on a Fund’s behalf.
Principal Investments.
To the extent permitted by applicable law, there may be situations in which a Funds’ interests may conflict with the
interests of one or more general accounts of Morgan Stanley and its affiliates or accounts managed by Morgan Stanley or its affiliates.
This may occur because these accounts hold public and private debt and equity securities of many issuers which may be or become
portfolio companies, or from whom portfolio companies may be acquired.
Transactions with
Portfolio Companies of Affiliated Investment Accounts. The companies in which a Fund may invest may be counterparties to
or participants in agreements, transactions or other arrangements with portfolio companies or other entities of portfolio investments
of Affiliated Investment Accounts (for example, a company in which a Fund invests may retain a company in which an Affiliated Investment
Account invests to provide services or may acquire an asset from such company or vice versa). Certain of these agreements, transactions
and arrangements involve fees, servicing payments, rebates and/or other benefits to Morgan Stanley or its affiliates. For example,
portfolio entities may, including at the encouragement of Morgan Stanley, enter into agreements regarding group procurement and/or
vendor discounts. Morgan Stanley and its affiliates may also participate in these agreements and may realize better pricing or
discounts as a result of the participation of portfolio entities. To the extent permitted by applicable law, certain of these agreements
may provide for commissions or similar payments and/or discounts or rebates to be paid to a portfolio entity of an Affiliated Investment
Account, and such payments or discounts or rebates may also be made directly
to Morgan Stanley or its affiliates. Under these arrangements, a particular portfolio company or other entity may benefit to a
greater degree than the other participants, and the funds, investment vehicles and accounts (which may or may not include a Fund)
that own an interest in such entity will receive a greater relative benefit from the arrangements than the Eaton Vance funds, investment
vehicles or accounts that do not own an interest therein. Fees and compensation received by portfolio companies of Affiliated Investment
Accounts in relation to the foregoing will not be shared with a Fund or offset advisory fees payable.
Investments in Portfolio
Investments of Other Funds. To the extent permitted by applicable law, when a Fund invests in certain companies or other
entities, other funds affiliated with the investment adviser may have made or may be making an investment in such companies or
other entities. Other funds that have been or may be managed by the investment adviser may invest in the companies or other entities
in which a Fund has made an investment. Under such circumstances, a Fund and such other funds may have conflicts of interest (e.g.,
over the terms, exit strategies and related matters, including the exercise of remedies of their respective investments). If the
interests held by a Fund are different from (or take priority over) those held by such other funds, the investment adviser may
be required to make a selection at the time of conflicts between the interests held by such other funds and the interests held
by a Fund.
Allocation of Expenses.
Expenses may be incurred that are attributable to a Fund and one or more other Affiliated Investment Accounts (including in connection
with issuers in which a Fund and such other Affiliated Investment Accounts have overlapping investments). The allocation of such
expenses among such entities raises potential conflicts of interest. The investment adviser and its affiliates intend to allocate
such common expenses among a Fund and any such other Affiliated Investment Accounts on a pro rata basis or in such other manner
as the investment adviser deems to be fair and equitable or in such other manner as may be required by applicable law.
Temporary Investments.
To more efficiently invest short-term cash balances held by a Fund, the investment adviser may invest such balances on an
overnight “sweep” basis in shares of one or more money market funds or other short-term vehicles. It is anticipated
that the investment adviser to these money market funds or other short-term vehicles may be the investment adviser (or an affiliate)
to the extent permitted by applicable law, including Rule 12d1-1 under the 1940 Act. The Funds currently invests in Eaton Vance
Cash Reserves Fund, LLC (Cash Reserves Fund), an affiliated investment company managed by Eaton Vance, for this purpose. Eaton
Vance does not currently receive a fee for advisory services provided to Cash Reserves Fund.
Transactions with
Affiliates. The investment adviser and any investment sub-adviser might purchase securities from underwriters or placement
agents in which a Morgan Stanley affiliate is a member of a syndicate or selling group, as a result of which an affiliate might
benefit from the purchase through receipt of a fee or otherwise. Neither the investment adviser nor any investment sub-adviser
will purchase securities on behalf of a Fund from an affiliate that is acting as a manager of a syndicate or selling group. Purchases
by the investment adviser on behalf of a Fund from an affiliate acting as a placement agent must meet the requirements of applicable
law. Furthermore, Morgan Stanley may face conflicts of interest when the Funds use service providers affiliated with Morgan Stanley
because Morgan Stanley receives greater overall fees when they are used.
General Process for
Potential Conflicts. All of the transactions described above involve the potential for conflicts of interest between the
investment adviser, related persons of the investment adviser and/or their clients. The Advisers Act, the 1940 Act and ERISA impose
certain requirements designed to decrease the possibility of conflicts of interest between an investment adviser and its clients.
In some cases, transactions may be permitted subject to fulfillment of certain conditions. Certain other transactions may be prohibited.
In addition, the investment adviser has instituted policies and procedures designed to prevent conflicts of interest from arising
and, when they do arise, to ensure that it effects transactions for clients in a manner that is consistent with its fiduciary duty
to its clients and in accordance with applicable law. The investment adviser seeks to ensure that potential or actual conflicts
of interest are appropriately resolved taking into consideration the overriding best interests of the client.
PARAMETRIC TAX-MANAGED INTERNATIONAL EQUITY
FUND
Supplement to Prospectus
dated March 1, 2021
1. The following replaces “Management”
under “Fund Summary”:
Management
Investment
Adviser. Boston Management and Research (“BMR”) serves as investment adviser to the Portfolio. Effective March
1, 2021, Eaton Vance Management (“Eaton Vance”) serves as investment adviser to the Fund.
Investment
Sub-Adviser. Parametric Portfolio Associates LLC (“Parametric”) serves as investment sub-adviser to the Portfolio,
and, effective March 1, 2021, serves as investment sub-adviser to the Fund.
Portfolio Managers
Paul
W. Bouchey, Global Head of Research at Parametric,
has managed the Portfolio since June 2014 and the Fund since March 1, 2021.
Thomas
C. Seto, Head of Investment Management at Parametric,
has managed the Portfolio since May 2012 and the Fund since March 1, 2021.
Jennifer
Sireklove, Managing Director, Investment Strategy
at Parametric, has managed the Portfolio since May 2019 and the Fund since March 1, 2021.
2. The following replaces “Management.”
in “Management and Organization”:
Management.
The Fund’s investment adviser is Eaton Vance Management (“Eaton Vance”) and the Portfolio’s investment
adviser is Boston Management and Research (“BMR”). Each of Eaton Vance and BMR have offices at Two International Place,
Boston, MA 02110. Eaton Vance and BMR and their predecessor organizations have been managing assets since 1924 and managing
mutual funds since 1931. Prior to March 1, 2021, Eaton Vance was a wholly owned subsidiary and BMR was an indirect wholly owned
subsidiary of Eaton Vance Corp. (“EVC”).
On March 1, 2021, Morgan Stanley acquired EVC (the “Transaction”)
and Eaton Vance and BMR became indirect, wholly-owned subsidiaries of Morgan Stanley. In connection with the Transaction,
the Portfolio entered into a new investment advisory agreement with BMR and BMR entered into a new investment sub-advisory agreement
with Parametric (as defined below). Each such agreement was approved by Portfolio interestholders prior to the consummation of
the Transaction and was effective upon its closing.
In addition, Fund shareholders have approved a new investment advisory
agreement with Eaton Vance and a new investment sub-advisory agreement with Parametric that took effect upon the closing of the
Transaction. The new agreements for the Fund are substantially similar to the new investment advisory agreement and the new investment
sub-advisory agreement that were approved with respect to the Portfolio in connection with the Transaction. Under the Fund’s
new investment advisory agreement, Eaton Vance does not charge an advisory fee with respect to Fund assets invested in the Portfolio
or any other investment company for which Eaton Vance or its affiliates serve as investment adviser and receive an advisory fee.
The Fund currently invests all of its assets in the Portfolio. In the event Eaton Vance manages directly any assets of the Fund
in the future, the applicable advisory fee rate payable by the Fund will be the same as that payable by the Portfolio.
Morgan Stanley (NYSE: MS), whose principal offices are at 1585 Broadway,
New York, New York 10036, is a preeminent global financial services firm engaged in securities trading and brokerage activities,
as well as providing investment banking, research and analysis, financing and financial advisory services. As of December
31, 2020, after giving effect to the Transaction as described above, Morgan Stanley’s asset management operations had aggregate
assets under management of approximately $1.4 trillion.
The Fund is allocated its pro rata share of the advisory fee paid by the
Portfolio in which it invests. Effective March 1, 2021, any fee reduction agreement previously applicable to the Portfolio was
incorporated into its new investment advisory agreement with its investment adviser and/or its new investment sub-advisory agreement
with its sub-adviser.
Pursuant to an investment sub-advisory agreement, the Fund’s and
the Portfolio’s advisers have delegated the investment management of the Fund and the Portfolio, respectively, to Parametric
Portfolio Associates LLC (“Parametric”). Parametric’s principal offices are at 800 Fifth Avenue, Suite 2800,
Seattle, WA 98104. The Fund’s and the Portfolio’s advisers pay Parametric a portion of the advisory fee for sub-advisory
services provided to the Fund and Portfolio. On March 1, 2021, upon the closing of the Transaction, Parametric became an indirect,
wholly-owned subsidiary of Morgan Stanley. Prior to March 1, 2021, Parametric was an indirect, wholly-owned subsidiary of EVC.
The Fund’s semiannual report covering the fiscal period ended April
30 will provide information regarding the basis for the Trustees’ approval of the Fund’s and the Portfolio’s
investment advisory and sub-advisory agreements.
Parametric
Tax-Managed International Equity Fund. Under its investment advisory agreement with the Fund, Eaton Vance is entitled to
receive an advisory fee on average daily net assets per annum that are not invested in other investment companies for which Eaton
Vance or its affiliates (i) serves as adviser and (ii) receives an advisory fee. The fee is payable monthly.
Average Daily Net Assets for the Month
|
Annual Fee Rate
(for each level)
|
Up to $1 billion
|
0.500%
|
$1 billion but less than $2.5 billion
|
0.475%
|
$2.5 billion but less than $5 billion
|
0.455%
|
$5 billion and over
|
0.440%
|
Tax-Managed
International Equity Portfolio. Under its investment advisory agreement with the Portfolio, BMR receives a monthly investment
advisory fee as follows:
Average Daily Net Assets
|
Annual Fee Rate*
(for each level)
|
Up to $1 billion
|
0.500%
|
$1 billion but less than $2.5 billion
|
0.475%
|
$2.5 billion but less than $5 billion
|
0.455%
|
$5 billion and over
|
0.440%
|
* Prior to March 1, 2021, the Portfolio’s
fee was reduced pursuant to a fee reduction agreement dated November 1, 2016. Following the closing of the Transaction, as described
above, this fee reduction agreement was incorporated into the Portfolio's new investment advisory agreement with BMR.
For the fiscal year ended October 31, 2020, the effective annual rate
of investment advisory fee paid to BMR, based on average daily net assets of the Portfolio was 0.50%.
The Fund and the Portfolio are managed by a team of portfolio managers
from Parametric who are primarily responsible for the day-to-day management of the Fund and the Portfolio. The members of the team
are Paul W. Bouchey, Thomas C. Seto and Jennifer Sireklove. Mr. Bouchey has been a portfolio manager of the Portfolio since June
2014, Mr. Seto has been a portfolio manager of the Portfolio since May 2012 and Ms. Sireklove has been a portfolio manager of the
Portfolio since May 2019. Each of Messrs. Bouchey and Seto and Ms. Sireklove have managed the Fund since March 1, 2021. Mr. Bouchey
is currently Head of Global Research at Parametric, was previously Chief Investment Officer at Parametric since May 2015, and previously
led the research team at Parametric for more than five years. Mr. Seto is currently Head of Investment Management at Parametric
and was previously Director of Portfolio Management at Parametric for more than five years. Ms. Sireklove is currently Managing
Director, Investment Strategy at Parametric and was previously Director of Responsible Investing at Parametric and has been employed
at Parametric for more than five years. Messrs. Bouchey and Seto and Ms. Sireklove also manage other Eaton Vance funds.
The SAI provides additional information
about each portfolio manager’s compensation, other accounts managed by each portfolio manager, and each portfolio manager’s
ownership of Fund shares.
Eaton Vance serves as the administrator of the Fund, providing the Fund
with administrative services and related office facilities. Eaton Vance receives no compensation for serving as administrator of
the Fund.
Eaton Vance provides sub-transfer agency
and related services to Eaton Vance mutual funds pursuant to a Sub-Transfer Agency Support Services Agreement. For its services
under the agreement, Eaton Vance receives an aggregate fee from such funds equal to its actual expenses incurred in performing
such services.
3. The following replaces the
first paragraph under “Payments to Financial Intermediaries.” in “Purchasing Shares”:
Payments to Financial
Intermediaries. In addition to payments disclosed under “Sales Charges” below, the principal underwriter, out
of its own resources, may make cash payments to certain financial intermediaries (which may include affiliates of the principal
underwriter and investment adviser) who provide marketing support, transaction processing and/or administrative services and, in
some cases, include some or all Eaton Vance funds in preferred or specialized selling programs. Payments made by the principal
underwriter to a financial intermediary may be significant and are typically in the form of fees based on Fund sales, assets, transactions
processed and/or accounts attributable to that financial intermediary. Financial intermediaries also may receive amounts from the
principal underwriter in connection with educational or due diligence meetings that include information concerning Eaton Vance
funds. The principal underwriter may pay or allow other promotional incentives or payments to financial intermediaries to the extent
permitted by applicable laws and regulations.
4. The following replaces “Fund
Purchases through Edward D. Jones & Co., L.P. (“Edward Jones”)” under “Appendix A – Financial
Intermediary Sales Charge Variations”:
Policies Regarding Transactions Through Edward
D. Jones & Co., L.P. (“Edward Jones”)
The following information has been provided by Edward Jones:
Effective on or after March 1, 2021, the following information supersedes
prior information with respect to transactions and positions held in fund shares through an Edward Jones system. Clients of Edward
Jones (also referred to as “shareholders”) purchasing fund shares on the Edward Jones commission and fee-based platforms
are eligible only for the following sales charge discounts (also referred to as “breakpoints”) and waivers, which can
differ from discounts and waivers described elsewhere in the mutual fund prospectus or statement of additional information (“SAI”)
or through another broker-dealer. In all instances, it is the shareholder's responsibility to inform Edward Jones at the time of
purchase of any relationship, holdings of fund family or other facts qualifying the purchaser for discounts or waivers. Edward
Jones can ask for documentation from the shareholder of such circumstance. Shareholders should contact Edward Jones if they have
questions regarding their eligibility for these discounts and waivers.
Breakpoints
|
·
|
Breakpoint pricing, otherwise known as volume pricing, at dollar thresholds as described in the prospectus.
|
Rights of Accumulation (“ROA”)
|
·
|
The applicable sales charge on a purchase of Class A shares is determined by taking into account all share classes (except
certain money market funds and any assets held in group retirement plans) of the mutual fund family held by the shareholder or
in an account grouped by Edward Jones with other accounts for the purpose of providing certain pricing considerations (“pricing
groups”). If grouping assets as a shareholder, this includes all share classes held on the Edward Jones platform and/or held
on another platform. The inclusion of eligible fund family assets in the ROA calculation is dependent on the shareholder notifying
Edward Jones of such assets at the time of calculation. Money market funds are included only if such shares were sold with a sales
charge at the time of purchase or acquired in exchange for shares purchased with a sales charge.
|
|
·
|
The employer maintaining a SEP IRA plan and/or SIMPLE IRA plan may elect to establish or change ROA for the IRA accounts associated
with the plan to a plan-level grouping as opposed to including all share classes at a shareholder or pricing group level.
|
|
·
|
ROA is determined by calculating the higher of cost minus redemptions or market value (current shares x NAV).
|
Letter of Intent (“LOI”)
|
·
|
Through a LOI, shareholders can receive the sales charge and breakpoint discounts for purchases shareholders intend to make
over a 13-month period from the date Edward Jones receives the LOI. The LOI is determined by calculating the higher of cost or
market value of qualifying holdings at LOI initiation in combination with the value that the shareholder intends to buy over a
13-month period to calculate the front-end sales charge and any breakpoint discounts. Each purchase the shareholder makes during
that 13-month period will receive the sales charge and breakpoint discount that applies to the total amount. If during the 13-month
period the shareholder redeems any of the shares purchased pursuant to a LOI, the value of the redeemed shares will not be included
for purposes of satisfying the LOI. The inclusion of eligible fund family assets in the LOI calculation is dependent on the shareholder
notifying Edward Jones of such assets at the time of calculation. Purchases made before the LOI is received by Edward Jones are
not adjusted under the LOI and will not reduce the sales charge previously paid. Sales charges will be adjusted if LOI is not met.
|
|
·
|
If the employer maintaining a SEP IRA plan and/or SIMPLE IRA plan has elected to establish or change ROA for the IRA accounts
associated with the plan to a plan-level grouping, LOIs will also be at the plan-level and may only be established by the employer.
|
Front-end Sales Charge Waivers
Sales charges are waived for the following shareholders and
in the following situations:
|
·
|
Associates of Edward Jones and its affiliates and their family members who are in the same pricing group (as determined by
Edward Jones under its policies and procedures) as the associate. This waiver will continue for the remainder of the associate's
life if the associate retires from Edward Jones in good-standing and remains in good standing pursuant to Edward Jones' policies
and procedures.
|
|
·
|
Shares purchased in an Edward Jones fee-based program.
|
|
·
|
Shares purchased through reinvestment of capital gains distributions and dividend reinvestment.
|
|
·
|
Shares purchased from the proceeds of redeemed shares of the same fund family so long as the following conditions are
met: 1) the proceeds are from the sale of shares within 60 days of the purchase, and 2) the sale and purchase are made in the
same share class and the same account or the purchase is made in
an individual retirement account with proceeds from liquidations in a non-retirement account.
|
|
·
|
Shares exchanged into Class A shares from another share class so long as the exchange is into the same fund and was initiated
at the discretion of Edward Jones. Edward Jones is responsible for any remaining Contingent Deferred Sales Charge (“CDSC”)
due to the fund company or its affiliate, if applicable. Any future purchases are subject to the applicable sales charge as disclosed
in the prospectus.
|
|
·
|
Exchanges from Class C shares to Class A shares of the same fund, generally, in the 84th month following the anniversary of
the purchase date or earlier at the discretion of Edward Jones.
|
CDSC Waivers
If the shareholder purchases shares that are subject to a CDSC
and those shares are redeemed before the CDSC is expired, the shareholder is responsible to pay the CDSC except in the following
conditions:
|
·
|
The death or disability of the shareholder.
|
|
·
|
Systematic withdrawals with up to 10% per year of the account value.
|
|
·
|
Return of excess contributions from an Individual Retirement Account (IRA).
|
|
·
|
Shares sold as part of a required minimum distribution for IRA and retirement accounts if the redemption is taken in or after
the year the shareholder reaches qualified age based on applicable IRS regulations.
|
|
·
|
Shares sold to pay Edward Jones fees or costs in such cases where the transaction is initiated by Edward Jones. Edward Jones
is responsible for any remaining CDSC due to the fund company or its affiliate, if applicable.
|
|
·
|
Shares exchanged in an Edward Jones fee-based program. Edward Jones is responsible for any remaining CDSC due to the fund company
or its affiliate, if applicable.
|
|
·
|
Shares acquired through NAV reinstatement.
|
|
·
|
Shares redeemed at the discretion of Edward Jones for Minimum Balances as described below.
|
******************************************************************************
Other Important Information Regarding Transactions Through Edward Jones
Minimum Purchase Amounts
|
·
|
Initial purchase minimum: $250
|
|
·
|
Subsequent purchase minimum: none
|
Minimum Balances
|
·
|
Edward Jones has the right to redeem at its discretion fund holdings with a balance of $250 or less. The following are examples
of accounts that are not included in this policy:
|
|
·
|
A fee-based account held on an Edward Jones platform
|
|
·
|
A 529 account held on an Edward Jones platform
|
|
·
|
An account with an active systematic investment plan or LOI
|
Exchanging Share Classes
At any time it deems necessary, Edward Jones has the authority to exchange
at NAV a shareholder's holdings in a fund to Class A shares of the same fund. Edward Jones is responsible for any remaining CDSC
due to the fund company or its affiliate, if applicable. Any future purchases are subject to the applicable sales charge as disclosed
in the prospectus.
March 1, 2021
|
37961 3.1.21
|
PARAMETRIC TAX-MANAGED INTERNATIONAL EQUITY FUND
Supplement to Statement
of Additional Information dated March 1, 2021
1. The following replaces the
first paragraph under “Fund Management.” in “Management and Organization”:
Fund Management.
The Trustees of the Trust are responsible for the overall management and supervision of the affairs
of the Trust. The Trustees of the Portfolio are responsible for the overall management and supervision of the Portfolio. The Board
members and officers of the Trust and Portfolio are listed below. Except as indicated, each individual has held the office shown
or other offices in the same company for the last five years. Board members hold indefinite terms of office. Each Trustee holds
office until his or her successor is elected and qualified, subject to a prior death, resignation, retirement, disqualification
or removal. Under the terms of the Fund’s and the Portfolio’s current Trustee retirement policy, an Independent
Trustee must retire and resign as a Trustee on the earlier of: (i) the first day of July following his or her 74th birthday; or
(ii), with limited exception, December 31st of the 20th year in which he or she has served as a Trustee. However, if such retirement
and resignation would cause the Fund or Portfolio to be out of compliance with Section 16 of the 1940 Act or any other regulations
or guidance of the SEC, then such retirement and resignation will not become effective until such time as action has been taken
for the Fund or Portfolio to be in compliance therewith. The “noninterested Trustees” consist of those Trustees
who are not “interested persons” of the Trust and the Portfolio, as that term is defined under the 1940 Act. The business
address of each Board member and officer is Two International Place, Boston, Massachusetts 02110. As used in this SAI, “EVC”
refers to Eaton Vance Corp., “EV” refers to Eaton Vance, Inc., “Eaton Vance” refers to Eaton Vance Management
and “EVD” refers to Eaton Vance Distributors, Inc. (see “Principal Underwriter” under “Other Service
Providers”). EV is the trustee of each of Eaton Vance and BMR. Effective March 1, 2021, each of Eaton Vance, BMR, EVD and
EV are indirect whollyowned subsidiaries of Morgan Stanley. Each officer affiliated with Eaton Vance may hold a position with other
Eaton Vance affiliates that is comparable to his or her position with Eaton Vance listed below.
2. The following replaces the
Thomas E. Faust Jr. row in the Trustees table and in his biographical narrative in “Management and Organization”:
THOMAS E. FAUST JR.
1958
|
|
Trustee
|
|
Since 2007
|
|
Chairman of Morgan Stanley Investment Management, Inc. (MSIM), Director and President of EV, Chief Executive Officer and President of Eaton Vance and BMR, and Director of EVD. Formerly, Chairman, Chief Executive Officer and President of EVC. Trustee and/or officer of 141 registered investment companies. Mr. Faust is an interested person because of his positions with MSIM, BMR, Eaton Vance, EVD and EV, which are affiliates of the Trust and the Portfolio, and his former position with EVC, which was an affiliate of the Trust and Portfolio prior to March 1, 2021.
|
|
141
|
|
Formerly, Director of EVC (2007-2021) and Hexavest Inc. (2012-2021) (investment management firm).
|
Thomas E. Faust
Jr. Mr. Faust has served as a member of the Eaton Vance Fund Boards since 2007. Effective March 1, 2021, he is Chairman
of MSIM. He is also Director and President of EV, Chief Executive Officer and President of Eaton Vance and BMR, and Director of
EVD. Mr. Faust previously served as Chairman and Chief Executive Officer of EVC from 2007 through March 1, 2021 and as President
of EVC from 2006 through March 1, 2021. Mr. Faust served as a Director of Hexavest Inc. from 2012-2021. From 2016 through 2019,
Mr. Faust served as a Director of SigFig Wealth Management LLC. Mr. Faust previously served as an equity analyst, portfolio manager,
Director of Equity Research and Management and Chief Investment Officer of Eaton Vance from 1985-2007. He holds B.S. degrees in
Mechanical Engineering and Economics from the Massachusetts Institute of Technology and an MBA from Harvard Business School. Mr.
Faust has been a Chartered Financial Analyst since 1988. He is a trustee and member of the executive committee of the Boston Symphony
Orchestra, Inc. and trustee emeritus of Wellesley College.
3. The following replaces the
first and second paragraphs under “Investment Advisory Services.” in “Investment Advisory and Administrative
Services”:
Investment Advisory
Services. As described in the Prospectus, upon the closing of the transaction by which Morgan Stanley acquired EVC (the
“Transaction”), the Fund and the Portfolio entered into a new investment advisory agreement with Eaton Vance or BMR,
as applicable, and Eaton Vance or BMR, as applicable, entered into a new investment sub-advisory agreement with Parametric. Each
investment adviser manages the investments and affairs of the Portfolio and the Fund and provides related office facilities and
personnel subject to the supervision of the Trust's Board, in the case of the Fund, or the Portfolio’s Board. Each investment
adviser and sub-adviser furnishes investment research, advice and supervision, furnishes an investment program and determines what
securities will be purchased, held or sold by the Portfolio and the Fund and what portion, if any, of the Portfolio’s, and
the Fund’s assets will be held uninvested. Each Investment Advisory Agreement and Investment Sub-Advisory Agreement requires
the investment adviser or sub-adviser to pay the compensation and expenses of all officers and Trustees who are members of the
investment adviser's or sub-adviser’s organization and all personnel of the investment adviser or sub-adviser performing
services relating to research and investment activities.
As described in the Prospectus, Eaton Vance serves as investment adviser
for the Fund effective March 1, 2021. For a description of the compensation that the Portfolio or the Fund pays the investment
adviser under its investment advisory agreement, see the Prospectus.
4. The following replaces the
last paragraph under “Investment Advisory Services.” in “Investment Advisory and Administrative Services”:
Each Investment Advisory Agreement and Investment Sub-Advisory Agreement
with the investment adviser or sub-adviser continues in effect through and including the second anniversary of its execution and
shall continue in full force and effect indefinitely thereafter, but only so long as such continuance after such second anniversary
is specifically approved at least annually (i) by the vote of a majority of the noninterested Trustees of the Trust, in the case
of the Fund, or the Portfolio, in the case of the Portfolio, cast in person at a meeting specifically called for the purpose of
voting on such approval and (ii) by the Board of the Trust, in the case of the Fund, or the Portfolio, in the case of the Portfolio,
or by vote of a majority of the outstanding voting securities of the Portfolio or Fund. Each Agreement may be terminated at any
time without penalty on sixty (60) days’ written notice by either party, or by vote of the majority of the outstanding voting
securities of the Portfolio or Fund, and each Agreement will terminate automatically in the event of its assignment. Each
Agreement provides that the investment adviser or sub-adviser may render services to others. Each Agreement also provides that
the investment adviser or sub-adviser shall not be liable for any loss incurred in connection with the performance of its duties,
or action taken or omitted under the Agreement, in the absence of willful misfeasance, bad faith, gross negligence or reckless
disregard of its obligations and duties thereunder, or for any losses sustained in the acquisition, holding or disposition of any
security or other investment. Each Agreement is not intended to, and does not, confer upon any person not a party to it any right,
benefit or remedy of any nature, except that the new sub-advisory agreement with Parametric (as described above) states that the
Fund is a third party beneficiary of such agreement.
5. The following replaces “Information
About BMR and Eaton Vance.” in “Investment Advisory and Administrative Services”:
Information About
BMR and Eaton Vance. BMR and Eaton Vance are business trusts organized under the laws of the Commonwealth of Massachusetts.
EV serves as trustee of BMR and Eaton Vance. As described in the Prospectus, following the closing of the Transaction on March
1, 2021, EV, Eaton Vance and BMR became indirect wholly-owned subsidiaries of Morgan Stanley (NYSE: MS), a preeminent global financial
services firm engaged in securities trading and brokerage activities, as well as providing investment banking, research and analysis,
financing and financial advisory services.
Prior to March 1, 2021, EV and Eaton Vance were wholly-owned subsidiaries
of EVC, a Maryland corporation and publicly-held holding company and BMR was an indirect wholly owned subsidiary of EVC. EVC through
its subsidiaries and affiliates engaged primarily in investment management, administration and marketing activities. The Directors
of EVC were Thomas E. Faust Jr., Ann E. Berman, Leo I. Higdon, Jr., Paula A. Johnson, Brian D. Langstraat, Dorothy E. Puhy, Winthrop
H. Smith, Jr. and Richard A. Spillane, Jr. All shares of the outstanding Voting Common Stock of EVC were deposited in a Voting
Trust, the Voting Trustees of which were Mr. Faust, Paul W. Bouchey, Craig R. Brandon, Daniel C. Cataldo, Michael A. Cirami, Cynthia
J. Clemson, James H. Evans, Maureen A. Gemma, Laurie G. Hylton, Mr. Langstraat, Thomas Lee, Frederick S. Marius, David C. McCabe,
Edward J. Perkin, Lewis R. Piantedosi, Charles B. Reed, Craig P. Russ, Thomas C. Seto, John L. Shea, Eric A. Stein, John H. Streur,
Andrew N. Sveen, Payson F. Swaffield, R. Kelly Williams and Matthew J. Witkos (all of whom are or were officers of Eaton Vance
or its affiliates). The Voting Trustees had unrestricted voting rights for the election of Directors of EVC. Prior to March 1,
2021, all of the outstanding voting trust receipts issued under said Voting Trust were owned by certain of the officers of BMR
and Eaton Vance who may also have been officers, or officers and Directors of EVC and EV. As indicated under “Management
and Organization,” all of the officers of the Trust (as well as Mr. Faust who is also a Trustee) are employees of Eaton Vance
and/or BMR.
6. The following replaces “Information
About Parametric.” in “Investment Advisory and Administrative Services”:
Information About
Parametric. Parametric is an investment manager that has been providing investment advisory services since its formation
in 1987. Headquartered in Seattle, Parametric has offices in Minneapolis, New York City, Boston and Westport, Connecticut. As described
in the Prospectus, following the closing of the Transaction on March 1, 2021, Parametric became an indirect wholly-owned subsidiary
of Morgan Stanley. Prior to March 1, 2021, Parametric was an indirect wholly owned subsidiary of EVC.
7. The following replaces “Compensation
Structure for Parametric.” and “Method to Determine Compensation.” under “Portfolio Managers.” in
“Investment Advisory and Administrative Services”:
Compensation Structure
for Parametric. Compensation of Parametric portfolio managers and other investment professionals has three primary
components: (1) a base salary, (2) an annual cash bonus, and (3) annual equity-based compensation awards that are subject to a
fixed vesting and distribution schedule. Stock-based compensation awards and adjustments in base salary and bonuses are typically
paid and/or put into effect at or shortly after, the firm’s fiscal year-end, December 31.
Method to Determine
Compensation. Parametric seeks to compensate portfolio managers commensurate with their responsibilities and performance
while remaining competitive with other firms within the investment management industry. In the case of investment strategies that
are systematic, including the Fund’s, portfolio managers primarily are measured with respect to whether a strategy’s
rules as implemented delivered on the strategy’s objectives. In evaluating the foregoing, Parametric evaluates the manner
in which the strategy is implemented relative to strategy targets, rebalancing portfolio exposures consistent
with pre-determined triggers, and judicious trade construction. Portfolio managers are also expected to monitor factors that may
impact implementation of a strategy and to seek potential ways to address them as needed.
Salaries, bonuses and stock-based compensation are also influenced by
the operating performance of Parametric and Morgan Stanley. While the salaries of Parametric portfolio managers are comparatively
fixed, cash bonuses and stock-based compensation may fluctuate from year to year, based on changes in financial performance and
other factors.
Parametric participates in compensation surveys that benchmark salaries,
total cash and total compensation against other firms in the industry. This data is reviewed, along with a number of other factors,
to ensure that compensation remains competitive with other firms in the industry.
8. The following replaces the
first two paragraphs in “Other Service Providers”:
Principal Underwriter.
Eaton Vance Distributors, Inc. (“EVD”), Two International Place, Boston, MA 02110 is
the principal underwriter of the Fund. The principal underwriter acts as principal in selling shares under a Distribution Agreement
with the Trust. The expenses of printing copies of prospectuses used to offer shares and other selling literature and of advertising
are borne by the principal underwriter. The fees and expenses of qualifying and registering and maintaining qualifications and
registrations of the Fund and its shares under federal and state securities laws are borne by the Fund. The Distribution Agreement
is renewable annually by the members of the Board (including a majority of the noninterested Trustees who have no direct or indirect
financial interest in the operation of the Distribution Agreement or any applicable Distribution Plan), may be terminated on sixty
days’ notice either by such Trustees or by vote of a majority of the outstanding Fund shares or on six months’ notice
by the principal underwriter and is automatically terminated upon assignment. The principal underwriter distributes shares on a
“best efforts” basis under which it is required to take and pay for only such shares as may be sold. Effective March
1, 2021, EVD is an indirect wholly-owned subsidiary of Morgan Stanley. Prior to March 1, 2021, EVD was a direct, wholly-owned subsidiary
of EVC. Mr. Faust is also a Director of EVD. EVD also serves as placement agent for the Portfolio, if applicable.
Custodian.
State Street Bank and Trust Company (“State Street”), State Street Financial Center,
One Lincoln Street, Boston, MA 02111, serves as custodian to the Fund and Portfolio, if applicable. State Street has custody of
all cash and securities representing the Fund’s interest in the Portfolio, has custody of the Portfolio’s and
the Fund's assets, maintains the general ledger of the Portfolio and the Fund and computes the daily net asset value of interests
in the Portfolio and the net asset value of shares of the Fund. In such capacity it attends to details in connection with the sale,
exchange, substitution, transfer or other dealings with the Fund's and the Portfolio’s investments, receives and disburses
all funds and performs various other ministerial duties upon receipt of proper instructions from the Trust and the Portfolio. State
Street also provides services in connection with the preparation of shareholder reports and the electronic filing of such reports
with the SEC.
9. The following replaces the
first, second, fourth, fifth and sixth paragraphs in “Portfolio Securities Transactions”:
Decisions concerning the execution of portfolio security transactions,
including the selection of the market and the broker-dealer firm or other financial intermediary (each an “intermediary”),
are made by the investment adviser. The Fund and Portfolio are responsible for the expenses associated with each of its portfolio
transactions. The investment adviser is also responsible for the execution of transactions for all other accounts managed by it.
The investment adviser places the portfolio security transactions for execution with one or more intermediaries firms. The investment
adviser uses its best efforts to obtain execution of portfolio security transactions at prices that, in the investment adviser’s
judgment, are advantageous to the client and at a reasonably competitive spread or (when a disclosed commission is being charged)
at reasonably competitive commission rates. In seeking such execution, the investment adviser will use its best judgment in evaluating
the terms of a transaction, and will give consideration to various relevant factors, which may include, without limitation, the
full range and quality of the intermediary’s services, responsiveness of the intermediary to the investment adviser, the
size and type of the transaction, the nature and character of the market for the security, the confidentiality, speed and certainty
of effective execution required for the transaction, the general execution and operational capabilities of the intermediary, the
reputation, reliability, experience and financial condition of the intermediary, the value and quality of the services rendered
by the intermediary in this and other transactions, and the amount of the spread or commission, if any. In addition, the investment
adviser may consider the receipt of Research Services (as defined below), provided it does not compromise the investment adviser’s
obligation to seek best overall execution for the Fund or Portfolio and is otherwise in compliance with applicable law. The investment
adviser may engage in portfolio transactions with an intermediary that sells shares of Eaton Vance funds, provided such transactions
are not directed to that intermediary as compensation for the promotion or sale of such shares.
As described in the Prospectus, following the closing of the Transaction
on March 1, 2021, the investment adviser became an “affiliated person,” as defined in the 1940 Act, of Morgan Stanley
and its affiliates, including certain intermediaries (as previously defined). As a result, the investment adviser is subject to
certain restrictions regarding transactions with Morgan Stanley-affiliated intermediaries, as set forth in the 1940 Act. Under
certain circumstances, such restrictions may limit the investment adviser’s ability to place portfolio transactions on behalf
of a Fund or Portfolio at the desired time or price. Any transaction the investment adviser enters into with a Morgan Stanley-affiliated
intermediary on behalf of a Fund or Portfolio will be done in compliance with applicable laws, rules, and regulations; will be
subject to any restrictions contained in a Fund’s or Portfolio’s investment advisory agreement; will be subject to
the investment adviser’s duty to seek best execution; and, will comply with any applicable policies and procedures of the
investment adviser, as described below.
Subject to the overriding objective of obtaining the best execution of
orders and applicable rules and regulations, as described above, a Fund or Portfolio may use an affiliated intermediary, including
a Morgan Stanley-affiliated intermediary, to effect Fund or Portfolio portfolio transactions, including transactions in futures
contracts and options on futures contracts, under procedures adopted by the Board. In order to use such affiliated intermediaries,
the Fund’s or Portfolio’s Board must approve and periodically review procedures reasonably designed to ensure that
commission rates and other remuneration paid to the affiliated intermediaries are fair and reasonable in comparison to those of
other intermediaries for comparable transactions involving similar securities being purchased or sold during a comparable time
period.
Pursuant to an order issued by the SEC, a Fund or Portfolio is permitted
to engage in principal transactions in money market instruments, subject to certain conditions, with Morgan Stanley & Co. LLC,
a broker-dealer affiliated with Morgan Stanley.
Transactions on stock exchanges and other agency transactions involve
the payment of negotiated brokerage commissions. Such commissions vary among different broker-dealer firms, and a particular broker-dealer
may charge different commissions according to such factors as the difficulty and size of the transaction and the volume of business
done with such broker-dealer. Transactions in foreign securities often involve the payment of brokerage commissions, which may
be higher than those in the United States. There is generally no stated commission in the case of securities traded in the over-the-counter
markets including transactions in fixed-income securities which are generally purchased and sold on a net basis (i.e., without
commission) through intermediaries and banks acting for their own account rather than as brokers. Such intermediaries attempt to
profit from such transactions by buying at the bid price and selling at the higher asked price of the market for such obligations,
and the difference between the bid and asked price is customarily referred to as the spread. Fixed-income transactions may also
be transacted directly with the issuer of the obligations. In an underwritten offering the price paid often includes a disclosed
fixed commission or discount retained by the underwriter or dealer. Although spreads or commissions paid on portfolio security
transactions will, in the judgment of the investment adviser, be reasonable in relation to the value of the services provided,
commissions exceeding those which another firm might charge may be paid to intermediaries who were selected to execute transactions
on behalf of the investment adviser’s clients in part for providing brokerage and research services to the investment adviser
as permitted by applicable law.
Research Services provided by (and produced by) broker-dealers that execute
portfolio transactions or from affiliates of executing broker-dealers are referred to as “Proprietary Research.” Except
for trades executed in jurisdictions where such consideration is not permissible, the investment adviser may and does consider
the receipt of Proprietary Research Services as a factor in selecting broker dealers to execute client portfolio transactions,
provided it does not compromise the investment adviser’s obligation to seek best overall execution. In jurisdictions where
permissible, the investment adviser also may consider the receipt of Research Services under so called “client commission
arrangements” or “commission sharing arrangements” (both referred to as “CCAs”) as a factor in selecting
broker dealers to execute transactions, provided it does not compromise the investment adviser’s obligation to seek best
overall execution. Under a CCA arrangement, the investment adviser may cause client accounts to effect transactions through a broker-dealer
and request that the broker-dealer allocate a portion of the commissions paid on those transactions to a pool of commission credits
that are paid to other firms that provide Research Services to the investment adviser. Under a CCA, the broker-dealer that provides
the Research Services need not execute the trade. Participating in CCAs may enable the investment adviser to consolidate payments
for research using accumulated client commission credits from transactions executed through a particular broker-dealer to periodically
pay for Research Services obtained from and provided by other firms, including other broker-dealers that supply Research Services.
The investment adviser believes that CCAs offer the potential to optimize the execution of trades and the acquisition of a variety
of high quality Research Services that the investment adviser might not be provided access to absent CCAs. The investment adviser
may enter into CCA arrangements with a number of broker-dealers and other firms, including certain affiliates of the investment
adviser. The investment adviser will only enter into and utilize CCAs to the extent permitted by Section 28(e) and other applicable
law.
The investment companies sponsored by the investment adviser or certain
of its affiliates also may allocate brokerage commissions to acquire information relating to the
performance, fees and expenses of such companies and other investment companies, which information is used by the members
of the Board of such companies to fulfill their responsibility to oversee the quality of the services provided to various entities,
including the investment adviser, to such companies. Such companies may also pay cash for such information.
Securities considered as investments for
the Fund and Portfolio may also be appropriate for other investment accounts managed by the investment adviser or certain of its
affiliates. Whenever decisions are made to buy or sell securities by the Fund or Portfolio and one or more of such other accounts
simultaneously, the investment adviser will allocate the security transactions (including “new” issues) in a manner
which it believes to be equitable under the circumstances. As a result of such allocations, there may be instances where the Fund
or Portfolio will not participate in a transaction that is allocated among other accounts. If an aggregated order cannot be filled
completely, allocations will generally be made on a pro rata basis. An order may not be allocated on a pro rata basis where, for
example: (i) consideration is given to portfolio managers who have been instrumental in developing or negotiating a particular
investment; (ii) consideration is given to an account with specialized investment policies that coincide with the particulars of
a specific investment; (iii) pro rata allocation would result in odd-lot or de minimis amounts being allocated to a portfolio or
other client; or (iv) where the investment adviser reasonably determines that departure from a pro rata allocation is advisable.
While these aggregation and allocation policies could have a detrimental effect on the price or amount of the securities available
to the Fund or Portfolio from time to time, it is the opinion of the members of the Board that the benefits from the investment
adviser organization outweigh any disadvantage that may arise from exposure to simultaneous transactions.
10. The following is added as
a new section immediately prior to “Financial Statements”:
POTENTIAL CONFLICTS OF INTEREST
As a diversified global financial services firm, Morgan Stanley engages
in a broad spectrum of activities, including financial advisory services, investment management activities, lending, commercial
banking, sponsoring and managing private investment funds, engaging in broker-dealer transactions and principal securities, commodities
and foreign exchange transactions, research publication and other activities. In the ordinary course of its business, Morgan Stanley
is a full-service investment banking and financial services firm and therefore engages in activities where Morgan Stanley’s
interests or the interests of its clients may conflict with the interests of a Fund or Portfolio, if applicable, (collectively
for the purposes of this section, “Fund” or “Funds”). Morgan Stanley advises clients and sponsors, manages
or advises other investment funds and investment programs, accounts and businesses (collectively, together with the Funds, any
new or successor funds, programs, accounts or businesses, the ‘‘Affiliated Investment Accounts’’) with
a wide variety of investment objectives that in some instances may overlap or conflict with a Fund’s investment objectives
and present conflicts of interest. In addition, Morgan Stanley may also from time to time create new or successor Affiliated Investment
Accounts that may compete with a Fund and present similar conflicts of interest. The discussion below enumerates certain actual,
apparent and potential conflicts of interest. There is no assurance that conflicts of interest will be resolved in favor of Fund
shareholders and, in fact, they may not be. Conflicts of interest not described below may also exist.
Material Non-public
and Other Information. It is expected that confidential or material non-public information regarding an investment or potential
investment opportunity may become available to the investment adviser. If such information becomes available, the investment adviser
may be precluded (including by applicable law or internal policies or procedures) from pursuing an investment or disposition opportunity
with respect to such investment or investment opportunity.
The investment adviser may also from time to time be subject to contractual
‘‘stand-still’’ obligations and/or confidentiality obligations that may restrict its ability to trade in
certain investments on a Fund’s behalf. In addition, the investment adviser may be precluded from disclosing such information
to an investment team, even in circumstances in which the information would be beneficial if disclosed. Therefore, the investment
team may not be provided access to material non-public information in the possession of Morgan Stanley that might be relevant to
an investment decision to be made on behalf of a Fund, and the investment team may initiate a transaction or sell an investment
that, if such information had been known to it, may not have been undertaken. In addition, certain members of the investment team
may be recused from certain investment-related discussions so that such members do not receive information that would limit their
ability to perform functions of their employment with the investment adviser or its affiliates unrelated to that of a Fund. Furthermore,
access to certain parts of Morgan Stanley may be subject to third party confidentiality obligations and to information barriers
established by Morgan Stanley in order to manage potential conflicts of interest and regulatory restrictions, including without
limitation joint transaction restrictions pursuant to the 1940 Act. Accordingly, the investment adviser’s ability to source
investments from other business units within Morgan Stanley may be limited and there can be no assurance that the investment adviser
will be able to source any investments from any one or more parts of the Morgan Stanley network.
The investment adviser may restrict its investment decisions and activities
on behalf of the Funds in various circumstances, including because of applicable regulatory requirements or information held by
the investment adviser or Morgan Stanley. The investment adviser might not engage in transactions or other activities for, or enforce
certain rights in favor of, a Fund due to Morgan Stanley’s activities outside the Funds. In instances where trading of an
investment is restricted, the investment adviser may not be able to purchase or sell such investment on behalf of a Fund, resulting
in the Fund’s inability to participate in certain desirable transactions. This inability to buy or sell an investment could
have an adverse effect on a Fund’s portfolio due to, among other things, changes in an investment’s value during the
period its trading is restricted. Also, in situations where the investment adviser is required to aggregate its positions with
those of other Morgan Stanley business units for position limit calculations, the investment adviser may have to refrain from making
investments due to the positions held by other Morgan Stanley business units or their clients. There may be other situations where
the investment adviser refrains from making an investment due to additional disclosure obligations, regulatory requirements, policies,
and reputational risk, or the investment adviser may limit purchases or sales of securities in respect of which Morgan Stanley
is engaged in an underwriting or other distribution capacity.
Morgan Stanley has established certain information barriers and other
policies to address the sharing of information between different businesses within Morgan Stanley. As a result of information barriers,
the investment adviser generally will not have access, or will have limited access, to certain information and personnel in other
areas of Morgan Stanley relating to business transactions for clients (including transactions in investing, banking, prime brokerage
and certain other areas), and generally will not manage the Funds with the benefit of the information held by such other areas.
Morgan Stanley, due to its access to and knowledge of funds, markets and securities based on its prime brokerage and other businesses,
may make decisions based on information or take (or refrain from taking) actions with respect to interests in investments of the
kind held (directly or indirectly) by the Funds in a manner that may be adverse to the Funds, and will not have any obligation
or other duty to share information with the investment adviser.
In limited circumstances, however, including for purposes of managing
business and reputational risk, and subject to policies and procedures, Morgan Stanley personnel, including personnel of the investment
adviser, on one side of an information barrier may have access to information and personnel on the other side of the information
barrier through “wall crossings.” The investment adviser faces conflicts of interest in determining whether to engage
in such wall crossings. Information obtained in connection with such wall crossings may limit or restrict the ability of the investment
adviser to engage in or otherwise effect transactions on behalf of the Funds (including purchasing or selling securities that the
investment adviser may otherwise have purchased or sold for a Fund in
the absence of a wall crossing). In managing conflicts of interest that arise because of the foregoing, the investment adviser
generally will be subject to fiduciary requirements. The investment adviser may also implement internal information barriers or
ethical walls, and the conflicts described herein with respect to information barriers and otherwise with respect to Morgan Stanley
and the investment adviser will also apply internally within the investment adviser. As a result, a Fund may not be permitted to
transact in (e.g., dispose of a security in whole or in part) during periods when it otherwise would have been able to do so, which
could adversely affect a Fund. Other investors in the security that are not subject to such restrictions may be able to transact
in the security during such periods. There may also be circumstances in which, as a result of information held by certain portfolio
management teams in the investment adviser, the investment adviser limits an activity or transaction for a Fund, including if the
Fund is managed by a portfolio management team other than the team holding such information.
Investments by Morgan
Stanley and its Affiliated Investment Accounts. In serving in multiple capacities to Affiliated Investment Accounts, Morgan
Stanley, including the investment adviser and its investment teams, may have obligations to other clients or investors in Affiliated
Investment Accounts, the fulfillment of which may not be in the best interests of a Fund or its shareholders. A Fund’s investment
objectives may overlap with the investment objectives of certain Affiliated Investment Accounts. As a result, the members of an
investment team may face conflicts in the allocation of suitable investment opportunities among a Fund and other investment funds,
programs, accounts and businesses advised by or affiliated with the investment adviser. Certain Affiliated Investment Accounts
may provide for higher management or incentive fees or greater expense reimbursements or overhead allocations, all of which may
contribute to this conflict of interest and create an incentive for the investment adviser to favor such other accounts.
Morgan Stanley currently invests and plans to continue to invest on its
own behalf and on behalf of its Affiliated Investment Accounts in a wide variety of investment opportunities globally. Morgan Stanley
and its Affiliated Investment Accounts, to the extent consistent with applicable law and policies and procedures, will be permitted
to invest in investment opportunities without making such opportunities available to a Fund beforehand. Subject to the foregoing,
Morgan Stanley may offer investments that fall into the investment objectives of an Affiliated Investment Account to such account
or make such investment on its own behalf, even though such investment also falls within a Fund’s investment objectives.
A Fund may invest in opportunities that Morgan Stanley and/or one or more Affiliated Investment Accounts has declined, and vice
versa. All of the foregoing may reduce the number of investment opportunities available to a Fund and may create conflicts of interest
in allocating investment opportunities. Investors should note that the conflicts inherent in making such allocation decisions may
not always be resolved to a Fund’s advantage. There can be no assurance that a Fund will have an opportunity to participate
in certain opportunities that fall within their investment objectives.
To seek to reduce potential conflicts of interest and to attempt to allocate
such investment opportunities in a fair and equitable manner, the investment adviser has implemented allocation policies and procedures.
These policies and procedures are intended to give all clients of the investment adviser, including the Funds, fair access to investment
opportunities consistent with the requirements of organizational documents, investment strategies, applicable laws and regulations,
and the fiduciary duties of the investment adviser. Each client of the investment adviser that is subject to the allocation policies
and procedures, including each Fund, is assigned an investment team and portfolio manager(s) by the investment adviser. The investment
team and portfolio managers review investment opportunities and will decide with respect to the allocation of each opportunity
considering various factors and in accordance with the allocation policies and procedures. The allocation policies and procedures
are subject to change. Investors should note that the conflicts inherent in making such allocation decisions may not always be
resolved to the advantage of a Fund.
It is possible that Morgan Stanley or an Affiliated Investment Account,
including another Eaton Vance fund, will invest in or advise a company that is or becomes a competitor of a company of which a
Fund holds an investment. Such investment could create a conflict between the Fund, on the one hand, and Morgan Stanley or the
Affiliated Investment Account, on the other hand. In such a situation, Morgan Stanley may also have a conflict in the allocation
of its own resources to the portfolio investment. Furthermore, certain Affiliated Investment Accounts will be focused primarily
on investing in other funds which may have strategies that overlap and/or directly conflict and compete with a Fund.
In addition, certain investment professionals who are involved in a Fund’s
activities remain responsible for the investment activities of other Affiliated Investment Accounts managed by the investment adviser
and its affiliates, and they will devote time to the management of such investments and other newly created Affiliated Investment
Accounts (whether in the form of funds, separate accounts or other vehicles), as well as their own investments. In addition, in
connection with the management of investments for other Affiliated Investment Accounts, members of Morgan Stanley and its affiliates
may serve on the boards of directors of or advise companies which may compete with a Fund’s portfolio investments. Moreover,
these Affiliated Investment Accounts managed by Morgan Stanley and its affiliates may pursue investment opportunities that may
also be suitable for a Fund.
It should be noted that Morgan Stanley may, directly or indirectly, make
large investments in certain of its Affiliated Investment Accounts, and accordingly Morgan Stanley’s investment in a Fund
may not be a determining factor in the outcome of any of the foregoing conflicts. Nothing herein restricts or in any way limits
the activities of Morgan Stanley, including its ability to buy or sell interests in, or provide financing to, equity and/or debt
instruments, funds or portfolio companies, for its own accounts or for the accounts of Affiliated Investment Accounts or other
investment funds or clients in accordance with applicable law.
Different clients of the investment adviser, including a Fund, may invest
in different classes of securities of the same issuer, depending on the respective clients’ investment objectives and policies.
As a result, the investment adviser and its affiliates, at times, will seek to satisfy fiduciary obligations to certain clients
owning one class of securities of a particular issuer by pursuing or enforcing rights on behalf of those clients with respect to
such class of securities, and those activities may have an adverse effect on another client which owns a different class of securities
of such issuer. For example, if one client holds debt securities of an issuer and another client holds equity securities of the
same issuer, if the issuer experiences financial or operational challenges, the investment adviser and its affiliates may seek
a liquidation of the issuer on behalf of the client that holds the debt securities, whereas the client holding the equity securities
may benefit from a reorganization of the issuer. Thus, in such situations, the actions taken by the investment adviser or its affiliates
on behalf of one client can negatively impact securities held by another client. These conflicts also exist as between the investment
adviser’s clients, including the Funds, and the Affiliated Investment Accounts managed by Morgan Stanley.
The investment adviser and its affiliates may give advice and recommend
securities to other clients which may differ from advice given to, or securities recommended or bought for, a Fund even though
such other clients’ investment objectives may be similar to those of the Fund.
The investment adviser and its affiliates manage long and short portfolios.
The simultaneous management of long and short portfolios creates conflicts of interest in portfolio management and trading in that
opposite directional positions may be taken in client accounts managed by the same investment team, and creates risks such as:
(i) the risk that short sale activity could adversely affect the market value of long positions in one or more portfolios (and
vice versa) and (ii) the risks associated with the trading desk receiving opposing orders in the same security simultaneously.
The investment adviser and its affiliates have adopted policies and procedures that are reasonably designed to mitigate these conflicts.
In certain circumstances, the investment adviser invest on behalf of itself in securities and other instruments that would be appropriate
for, held by, or may fall within the investment guidelines of its clients, including a Fund. At times, the investment adviser will
give advice or take action for its own accounts that differs from, conflicts with, or is adverse to advice given or action taken
for any client.
From time to time, conflicts also arise due to the fact that certain securities
or instruments maybe held in some client accounts, including a Fund, but not in others, or the client accounts may have different
levels of holdings in certain securities or instruments, and because the accounts pay different levels of fees to the investment
adviser. In addition, at times an investment adviser investment team will give advice or take action with respect to the investments
of one or more clients that is not given or taken with respect to other clients with similar investment programs, objectives, and
strategies. Accordingly, clients with similar strategies will not always hold the same securities or instruments or achieve the
same performance. The investment adviser’s investment teams also advise clients with conflicting programs, objectives or
strategies. These conflicts also exist as between the investment adviser’s clients, including the Funds, and the Affiliated
Investment Accounts managed by Morgan Stanley.
The investment adviser maintains separate trading desks by investment
team and generally based on asset class, including two trading desks trading equity securities. These trading desks operate independently
of one another. The two equity trading desks do not share information. The separate equity trading desks may result in one desk
competing against the other desk when implementing buy and sell transactions, possibly causing certain accounts to pay more or
receive less for a security than other accounts. In addition, Morgan Stanley and its affiliates maintain separate trading desks
that operate independently of each other and do not share information with the investment adviser. The Morgan Stanley and affiliate
trading desks may compete against the investment adviser trading desks when implementing buy and sell transactions, possibly causing
certain Affiliated Investment Accounts to pay more or receive less for a security than other Affiliated Investment Accounts.
Payments to Broker-Dealers
and Other Financial Intermediaries. The investment adviser and/or EVD may pay compensation, out of their own funds and not
as an expense of the Funds, to certain financial intermediaries (which may include affiliates of the investment adviser and EVD),
including recordkeepers and administrators of various deferred compensation plans, in connection with the sale, distribution, marketing
and retention of shares of the Funds and/or shareholder servicing. For example, the investment adviser or EVD may pay additional
compensation to a financial intermediary for, among other things, promoting the sale and distribution of Fund shares, providing
access to various programs, mutual fund platforms or preferred or recommended mutual fund lists that may be offered by a financial
intermediary, granting EVD access to a financial intermediary’s financial advisors and consultants, providing assistance
in the ongoing education and training of a financial intermediary’s financial personnel, furnishing marketing support, maintaining
share balances and/or for sub-accounting, recordkeeping, administrative, shareholder or transaction processing services. Such payments
are in addition to any distribution fees, shareholder servicing fees and/or transfer agency fees that may be payable by the Funds.
The additional payments may be based on various factors, including level of sales (based on gross or net sales or some specified
minimum sales or some other similar criteria related to sales of the Funds and/or some or all other Eaton Vance funds), amount
of assets invested by the financial intermediary’s customers (which could include current or aged assets of the Funds and/or
some or all other Eaton Vance funds), a Fund’s advisory fee, some other agreed upon amount or other measures as determined
from time to time by the investment adviser and/or EVD. The amount of these payments may be different for different financial intermediaries.
The prospect of receiving, or the receipt of, additional
compensation, as described above, by financial intermediaries may provide such financial intermediaries and their financial
advisors and other salespersons with an incentive to favor sales of shares of the Funds over other investment options with
respect to which these financial intermediaries do not receive additional compensation (or receives lower levels of
additional compensation). These payment arrangements, however, will not change the price that an investor pays for shares of
the Funds or the amount that the Funds receive to invest on behalf of an investor. Investors may wish to take such payment
arrangements into account when considering and evaluating any recommendations relating to Fund shares and should review
carefully any disclosures provided by financial intermediaries as to their compensation.
Morgan Stanley Trading
and Principal Investing Activities. Notwithstanding anything to the contrary herein, Morgan Stanley will generally conduct
its sales and trading businesses, publish research and analysis, and render investment advice without regard for a Fund’s
holdings, although these activities could have an adverse impact on the value of one or more of the Fund’s investments, or
could cause Morgan Stanley to have an interest in one or more portfolio investments that is different from, and potentially adverse
to that of a Fund. Furthermore, from time to time, the investment adviser or its affiliates may invest “seed” capital
in a Fund, typically to enable the Fund to commence investment operations and/or achieve sufficient scale. The investment adviser
and its affiliates may hedge such seed capital exposure by investing in derivatives or other instruments expected to produce offsetting
exposure. Such hedging transactions, if any, would occur outside of a Fund.
Morgan Stanley’s sales and trading, financing and principal investing
businesses (whether or not specifically identified as such, and including Morgan Stanley’s trading and principal investing
businesses) will not be required to offer any investment opportunities to a Fund. These businesses may encompass, among other things,
principal trading activities as well as principal investing.
Morgan Stanley’s sales and trading, financing and principal investing
businesses have acquired or invested in, and in the future may acquire or invest in, minority and/or majority control positions
in equity or debt instruments of diverse public and/or private companies. Such activities may put Morgan Stanley in a position
to exercise contractual, voting or creditor rights, or management or other control with respect to securities or loans of portfolio
investments or other issuers, and in these instances Morgan Stanley may, in its discretion and subject to applicable law, act to
protect its own interests or interests of clients, and not a Fund’s interests.
Subject to the limitations of applicable law, a Fund may purchase from
or sell assets to, or make investments in, companies in which Morgan Stanley has or may acquire an interest, including as an owner,
creditor or counterparty.
Morgan Stanley’s
Investment Banking Activities. Morgan Stanley advises clients on a variety of mergers, acquisitions, restructuring, bankruptcy
and financing transactions. Morgan Stanley may act as an advisor to clients, including other investment funds that may compete
with a Fund and with respect to investments that a Fund may hold. Morgan Stanley may give advice and take action with respect to
any of its clients or proprietary accounts that may differ from the advice given, or may involve an action of a different timing
or nature than the action taken, by a Fund. Morgan Stanley may give advice and provide recommendations to persons competing with
a Fund and/or any of a Fund’s investments that are contrary to the Fund’s best interests and/or the best interests
of any of its investments.
Morgan Stanley could be engaged in financial advising, whether on the
buy-side or sell-side, or in financing or lending assignments that could result in Morgan Stanley’s determining in its discretion
or being required to act exclusively on behalf of one or more third parties, which could limit a Fund’s ability to transact
with respect to one or more existing or potential investments. Morgan Stanley may have relationships with third-party funds, companies
or investors who may have invested in or may look to invest in portfolio companies, and there could be conflicts between a Fund’s
best interests, on the one hand, and the interests of a Morgan Stanley client or counterparty, on the other hand.
To the extent that Morgan Stanley advises creditor or debtor companies
in the financial restructuring of companies either prior to or after filing for protection under Chapter 11 of the U.S. Bankruptcy
Code or similar laws in other jurisdictions, the investment adviser’s flexibility in making investments in such restructurings
on a Fund’s behalf may be limited. Morgan Stanley could provide investment banking services to competitors of portfolio companies,
as well as to private equity and/or private credit funds; such activities may present Morgan Stanley with a conflict of interest
vis-a-vis a Fund’s investment and may also result in a conflict in respect of the allocation of investment banking resources
to portfolio companies.
To the extent permitted by applicable law, Morgan Stanley may provide
a broad range of financial services to companies in which a Fund invests, including strategic and financial advisory services,
interim acquisition financing and other lending and underwriting or placement of securities, and Morgan Stanley generally will
be paid fees (that may include warrants or other securities) for such services. Morgan Stanley will not share any of the foregoing
interest, fees and other compensation received by it (including, for the avoidance of doubt, amounts received by the investment
adviser) with a Fund, and any advisory fees payable will not be reduced thereby.
Morgan Stanley may be engaged to act as a financial advisor to a company
in connection with the sale of such company, or subsidiaries or divisions thereof, may represent potential buyers of businesses
through its mergers and acquisition activities and may provide lending and other related financing services in connection with
such transactions. Morgan Stanley’s compensation for such activities is usually based upon realized consideration and is
usually contingent, in substantial part, upon the closing of the transaction. Under these circumstances, a Fund may be precluded
from participating in a transaction with or relating to the company being sold or participating in any financing activity related
to merger or acquisition.
To meet applicable regulatory requirements, there are periods when the
investment adviser will not engage in certain types of transactions in the securities of companies for which a broker-dealer affiliated
with Morgan Stanley is performing investment banking services. Fund shareholders will not receive notice of such instances. In
particular, when a broker-dealer affiliated with Morgan Stanley is engaged in an underwriting or other distribution of securities
of a company, the investment adviser may be prohibited from purchasing such securities on behalf of a Fund. In addition, under
certain circumstances, the investment adviser generally will not initiate transactions in the securities of companies with respect
to which affiliates of the investment adviser may have controlling interests or are affiliated.
The investment adviser believes that the nature and range of clients to
whom Morgan Stanley and its subsidiaries render investment banking and other services is such that it would be inadvisable to exclude
these companies from the Fund’s portfolio.
Morgan Stanley’s
Marketing Activities. Morgan Stanley is engaged in the business of underwriting, syndicating, brokering, administering,
servicing, arranging and advising on the distribution of a wide variety of securities and other investments in which a Fund may
invest. Subject to the restrictions of the 1940 Act, including Sections 10(f) and 17(e) thereof, a Fund may invest in transactions
in which Morgan Stanley acts as underwriter, placement agent, syndicator, broker, administrative agent, servicer, advisor, arranger
or structuring agent and receives fees or other compensation from the sponsors of such products or securities. Any fees earned
by Morgan Stanley in such capacity will not be shared with the investment adviser or the Funds. Certain conflicts of interest,
in addition to the receipt of fees or other compensation, would be inherent in these transactions. Moreover, the interests of one
of Morgan Stanley’s clients with respect to an issuer of securities in which a Fund has an investment may be adverse to the
investment adviser’s or a Fund’s best interests. In conducting the foregoing activities, Morgan Stanley will be acting
for its other clients and will have no obligation to act in the investment adviser’s or a Fund’s best interests.
Client Relationships.
Morgan Stanley has existing and potential relationships with a significant number of corporations, institutions and individuals.
In providing services to its clients, Morgan Stanley may face conflicts of interest with respect to activities recommended to or
performed for such clients, on the one hand, and a Fund, its shareholders or the entities in which the Fund invests, on the other
hand. In addition, these client relationships may present conflicts of interest in determining whether to offer certain investment
opportunities to a Fund.
In acting as principal or in providing advisory and other services to
its other clients, Morgan Stanley may engage in or recommend activities with respect to a particular matter that conflict with
or are different from activities engaged in or recommended by the investment adviser on a Fund’s behalf.
Principal Investments.
To the extent permitted by applicable law, there may be situations in which a Fund’s interests may conflict with the
interests of one or more general accounts of Morgan Stanley and its affiliates or accounts managed by Morgan Stanley or its affiliates.
This may occur because these accounts hold public and private debt and equity securities of many issuers which may be or become
portfolio companies, or from whom portfolio companies may be acquired.
Transactions with
Portfolio Companies of Affiliated Investment Accounts. The companies in which a Fund may invest may be counterparties to
or participants in agreements, transactions or other arrangements with portfolio companies or other entities of portfolio investments
of Affiliated Investment Accounts (for example, a company in which a Fund invests may retain a company in which an Affiliated Investment
Account invests to provide services or may acquire an asset from such company or vice versa). Certain of these agreements, transactions
and arrangements involve fees, servicing payments, rebates and/or other benefits to Morgan Stanley or its affiliates. For example,
portfolio entities may, including at the encouragement of Morgan Stanley, enter into agreements regarding group procurement and/or
vendor discounts. Morgan Stanley and its affiliates may also participate in these agreements and may realize better pricing or
discounts as a result of the participation of portfolio entities. To the extent permitted by applicable law, certain of these agreements
may provide for commissions or similar payments and/or discounts or rebates to be paid to a portfolio entity of an Affiliated Investment
Account, and such payments or discounts or rebates may also be made directly to Morgan Stanley or its affiliates. Under these arrangements,
a particular portfolio company or other entity may benefit to a greater degree than the other participants, and the funds, investment
vehicles and accounts (which may or may not include a Fund) that own an interest in such entity will receive a greater relative
benefit from the arrangements than the Eaton Vance funds, investment vehicles or accounts that do not own an interest therein.
Fees and compensation received by portfolio companies of Affiliated Investment Accounts in relation to the foregoing will not be
shared with a Fund or offset advisory fees payable.
Investments in Portfolio
Investments of Other Funds. To the extent permitted by applicable law, when a Fund invests in certain companies or other
entities, other funds affiliated with the investment adviser may have made or may be making an investment in such companies or
other entities. Other funds that have been or may be managed by the investment adviser may invest in the companies or other entities
in which a Fund has made an investment. Under such circumstances, a Fund and such other funds may have conflicts of interest (e.g.,
over the terms, exit strategies and related matters, including the exercise of remedies of their respective investments). If the
interests held by a Fund are different from (or take priority over) those held by such other funds, the investment adviser may
be required to make a selection at the time of conflicts between the interests held by such other funds and the interests held
by a Fund.
Allocation of Expenses.
Expenses may be incurred that are attributable to a Fund and one or more other Affiliated Investment Accounts (including in connection
with issuers in which a Fund and such other Affiliated Investment Accounts have overlapping investments). The allocation of such
expenses among such entities raises potential conflicts of interest. The investment adviser and its affiliates intend to allocate
such common expenses among a Fund and any such other Affiliated Investment Accounts on a pro rata basis or in such other manner
as the investment adviser deems to be fair and equitable or in such other manner as may be required by applicable law.
Temporary Investments.
To more efficiently invest short-term cash balances held by a Fund, the investment adviser may invest such balances on an
overnight “sweep” basis in shares of one or more money market funds or other short-term vehicles. It is anticipated
that the investment adviser to these money market funds or other short-term vehicles may be the investment adviser (or an affiliate)
to the extent permitted by applicable law, including Rule 12d1-1 under the 1940 Act. The Funds currently invests in Eaton Vance
Cash Reserves Fund, LLC (Cash Reserves Fund), an affiliated investment company managed byEaton Vance, for this purpose. Eaton Vance
does not currently receive a fee for advisory services provided to Cash Reserves Fund.
Transactions with
Affiliates. The investment adviser and any investment sub-adviser might purchase securities from underwriters or placement
agents in which a Morgan Stanley affiliate is a member of a syndicate or selling group, as a result of which an affiliate might
benefit from the purchase through receipt of a fee or otherwise. Neither the investment adviser nor any investment sub-adviser
will purchase securities on behalf of a Fund from an affiliate that is acting as a manager of a syndicate or selling group. Purchases
by the investment adviser on behalf of a Fund from an affiliate acting as a placement agent must meet the requirements of applicable
law. Furthermore, Morgan Stanley may face conflicts of interest when the Funds use service providers affiliated with Morgan Stanley
because Morgan Stanley receives greater overall fees when they are used.
General Process for
Potential Conflicts. All of the transactions described above involve the potential for conflicts of interest between the
investment adviser, related persons of the investment adviser and/or their clients. The Advisers Act, the 1940 Act and ERISA impose
certain requirements designed to decrease the possibility of conflicts of interest between an investment adviser and its clients.
In some cases, transactions may be permitted subject to fulfillment of certain conditions. Certain other transactions may be prohibited.
In addition, the investment adviser has instituted policies and procedures designed to prevent conflicts of interest from arising
and, when they do arise, to ensure that it effects transactions for clients in a manner that is consistent with its fiduciary duty
to its clients and in accordance with applicable law. The investment adviser seeks to ensure that potential or actual conflicts
of interest are appropriately resolved taking into consideration the overriding best interests of the client.
EATON VANCE STOCK FUND
Supplement to Prospectus
dated May 1, 2020
1. The following replaces “Management”
under “Fund Summary”:
Management
Investment
Adviser. Boston Management and Research (“BMR”) serves as investment adviser to the Portfolio. Effective March
1, 2021, Eaton Vance Management (“Eaton Vance”) serves as investment adviser to the Fund.
Portfolio
Manager. Charles B. Gaffney, Vice President of Eaton Vance and BMR, has managed the Portfolio
and its predecessor fund since November 2007 and has managed the Fund since March 1, 2021.
2. The following replaces “Management.”
under “Management and Organization”:
Management.
The Fund’s investment adviser is Eaton Vance Management (“Eaton Vance”) and the Portfolio’s investment
adviser is Boston Management and Research (“BMR”). Each of Eaton Vance and BMR have offices at Two International Place,
Boston, MA 02110. Eaton Vance and BMR and their predecessor organizations have been managing assets since 1924 and managing
mutual funds since 1931. Prior to March 1, 2021, Eaton Vance was a wholly owned subsidiary and BMR was an indirect wholly owned
subsidiary of Eaton Vance Corp. (“EVC”).
On March 1, 2021, Morgan Stanley acquired EVC (the “Transaction”)
and Eaton Vance and BMR became indirect, wholly-owned subsidiaries of Morgan Stanley. In connection with the Transaction,
the Portfolio entered into a new investment advisory agreement with BMR. The agreement was approved by Portfolio interestholders
prior to the consummation of the Transaction and was effective upon its closing.
In addition, Fund shareholders have approved a new investment advisory
agreement with Eaton Vance that took effect upon the closing of the Transaction. The new agreement for the Fund is substantially
similar to the new investment advisory agreement that was approved with respect to the Portfolio in connection with the Transaction.
Under the Fund’s new investment advisory agreement, Eaton Vance does not charge an advisory fee with respect to Fund assets
invested in the Portfolio or any other investment company for which Eaton Vance or its affiliates serve as investment adviser and
receive an advisory fee. The Fund currently invests all of its assets in the Portfolio. In the event Eaton Vance manages directly
any assets of the Fund in the future, the applicable advisory fee rate payable by the Fund will be the same as that payable by
the Portfolio.
Morgan Stanley (NYSE: MS), whose principal offices are at
1585 Broadway, New York, New York 10036, is a preeminent global financial services firm engaged in securities trading and
brokerage activities, as well as providing investment banking, research and analysis, financing and financial advisory services.
As of December 31, 2020, after giving effect to the Transaction as described above, Morgan Stanley’s asset management operations
had aggregate assets under management of approximately $1.4 trillion.
The Fund is allocated its pro rata share of the advisory fee paid by the
Portfolio in which it invests. Effective March 1, 2021, any fee reduction agreement previously applicable to the Portfolio was
incorporated into its new investment advisory agreement with its investment adviser.
The Fund’s annual report covering the fiscal period ended December
31 provides information regarding the basis for the Trustees’ approval of the Fund’s and the Portfolio’s investment
advisory agreements.
Stock
Fund. Under its investment advisory agreement with the Fund, Eaton Vance is entitled to receive an advisory fee on average
daily net assets per annum that are not invested in other investment companies for which Eaton Vance or its affiliates (i) serves
as adviser and (ii) receives an advisory fee. The fee is payable monthly.
Average Daily Net Assets for the Month
|
Annual Fee Rate
(for each level)
|
Up to $500 million
|
0.600%
|
$500 million but less than $1 billion
|
0.575%
|
$1 billion but less than $2.5 billion
|
0.550%
|
$2.5 billion but less than $5 billion
|
0.530%
|
$5 billion and over
|
0.515%
|
Stock
Portfolio. Under its investment advisory agreement with the Portfolio, BMR receives an advisory fee based on average daily
net assets. The fee is payable monthly.
Average Daily Net Assets for the Month
|
Annual Fee Rate
(for each level)*
|
Up to $500 million
|
0.600%
|
$500 million but less than $1 billion
|
0.575%
|
$1 billion but less than $2.5 billion
|
0.550%
|
$2.5 billion but less than $5 billion
|
0.530%
|
$5 billion and over
|
0.515%
|
|
*
|
Prior to March 1, 2021, the Portfolio’s advisory fee was reduced pursuant to a fee reduction agreement effective January
1, 2016. Following the closing of the Transaction, as described above, this fee reduction agreement was incorporated into the Portfolio’s
new investment advisory agreement with BMR.
|
For the fiscal year ended December 31, 2019, the effective annual rate
of advisory fee paid to BMR, based on average daily net assets of the Portfolio, was 0.59%.
Mr. Gaffney has served as the portfolio manager of the Portfolio and its
predecessor fund since November 2007 and has served as the portfolio manager of the Fund since March 1, 2021. He is a Vice President
of Eaton Vance and BMR and has managed other Eaton Vance portfolios for more than five years.
The SAI provides additional information about the portfolio manager’s
compensation, other accounts managed by the portfolio manager, and the portfolio manager’s ownership of Fund shares.
Eaton Vance serves as the administrator of the Fund, providing the Fund
with administrative services and related office facilities. Eaton Vance does not currently receive a fee for serving as administrator.
Eaton Vance provides sub-transfer agency
and related services to Eaton Vance mutual funds pursuant to a Sub-Transfer Agency Support Services Agreement. For its services
under the agreement, Eaton Vance receives an aggregate fee from such funds equal to its actual expenses incurred in performing
such services.
3. The following replaces the
first paragraph under “Payments to Financial Intermediaries.” in “Purchasing Shares”:
Payments to Financial
Intermediaries. In addition to payments disclosed under “Sales Charges” below, the principal underwriter, out
of its own resources, may make cash payments to certain financial intermediaries (which may include affiliates of the principal
underwriter and investment adviser) who provide marketing support, transaction processing and/or administrative services and, in
some cases, include some or all Eaton Vance funds in preferred or specialized selling programs. Payments made by the principal
underwriter to a financial intermediary may be significant and are typically in the form of fees based on Fund sales, assets, transactions
processed and/or accounts attributable to that financial intermediary. Financial intermediaries also may receive amounts from the
principal underwriter in connection with educational or due diligence meetings that include information concerning Eaton Vance
funds. The principal underwriter may pay or allow other promotional incentives or payments to financial intermediaries to the extent
permitted by applicable laws and regulations.
4. The following replaces “Fund
Purchases through Edward D. Jones & Co., L.P. (“Edward Jones”)” under “Appendix A – Financial
Intermediary Sales Charge Variations”:
Policies Regarding Transactions Through Edward
D. Jones & Co., L.P. (“Edward Jones”)
The following information has been provided by Edward Jones:
Effective on or after March 1, 2021, the following information supersedes
prior information with respect to transactions and positions held in fund shares through an Edward Jones system. Clients of Edward
Jones (also referred to as “shareholders”) purchasing fund shares on the Edward Jones commission and fee-based platforms
are eligible only for the following sales charge discounts (also referred to as “breakpoints”) and waivers, which can
differ from discounts and waivers described elsewhere in the mutual fund prospectus or statement of additional information (“SAI”)
or through another broker-dealer. In all instances, it is the shareholder's responsibility to inform Edward Jones at the time of
purchase of any relationship, holdings of fund family or other facts qualifying the purchaser for discounts or waivers. Edward
Jones can ask for documentation from the shareholder of such circumstance. Shareholders should contact Edward Jones if they have
questions regarding their eligibility for these discounts and waivers.
Breakpoints
|
·
|
Breakpoint pricing, otherwise known as volume pricing, at dollar thresholds as described in the prospectus.
|
Rights of Accumulation (“ROA”)
|
·
|
The applicable sales charge on a purchase of Class A shares is determined by taking into account all share classes (except
certain money market funds and any assets held in group retirement plans) of the mutual fund family held by the shareholder or
in an account grouped by Edward Jones with other accounts for the purpose of providing certain pricing considerations (“pricing
groups”). If grouping assets as a shareholder, this includes all share classes held on the Edward Jones platform and/or held
on another platform. The inclusion of eligible fund family assets in the ROA calculation is dependent on the shareholder notifying
Edward Jones of such assets at the time of calculation. Money market funds are included only if such shares were sold with a sales
charge at the time of purchase or acquired in exchange for shares purchased with a sales charge.
|
|
·
|
The employer maintaining a SEP IRA plan and/or SIMPLE IRA plan may elect to establish or change ROA for the IRA accounts associated
with the plan to a plan-level grouping as opposed to including all share classes at a shareholder or pricing group level.
|
|
·
|
ROA is determined by calculating the higher of cost minus redemptions or market value (current shares x NAV).
|
Letter of Intent (“LOI”)
|
·
|
Through a LOI, shareholders can receive the sales charge and breakpoint discounts for purchases shareholders intend to make
over a 13-month period from the date Edward Jones receives the LOI. The LOI is determined by calculating the higher of cost or
market value of qualifying holdings at LOI initiation in combination with the value that the shareholder intends to buy over a
13-month period to calculate the front-end sales charge and any breakpoint discounts. Each purchase the shareholder makes during
that 13-month period will receive the sales charge and breakpoint discount that applies to the total amount. If during the 13-month
period the shareholder redeems any of the shares purchased pursuant to a LOI, the value of the redeemed shares will not be included
for purposes of satisfying the LOI. The inclusion of eligible fund family assets in the LOI calculation is dependent on the shareholder
notifying Edward Jones of such assets at the time of calculation. Purchases made before the LOI is received by Edward Jones are
not adjusted under the LOI and will not reduce the sales charge previously paid. Sales charges will be adjusted if LOI is not met.
|
|
·
|
If the employer maintaining a SEP IRA plan and/or SIMPLE IRA plan has elected to establish or change ROA for the IRA accounts
associated with the plan to a plan-level grouping, LOIs will also be at the plan-level and may only be established by the employer.
|
Front-end Sales Charge Waivers
Sales charges are waived for the following shareholders and
in the following situations:
|
·
|
Associates of Edward Jones and its affiliates and their family members who are in the same pricing group (as determined by
Edward Jones under its policies and procedures) as the associate. This waiver will continue for the remainder of the associate's
life if the associate retires from Edward Jones in good-standing and remains in good standing pursuant to Edward Jones' policies
and procedures.
|
|
·
|
Shares purchased in an Edward Jones fee-based program.
|
|
·
|
Shares purchased through reinvestment of capital gains distributions and dividend reinvestment.
|
|
·
|
Shares purchased from the proceeds of redeemed shares of the same fund family so long as the following conditions are met:
1) the proceeds are from the sale of shares within 60 days of the purchase, and 2) the sale and purchase are made in the same share
class and the same account or the purchase is made in an individual retirement account with proceeds from liquidations in a non-retirement
account.
|
|
·
|
Shares exchanged into Class A shares from another share class so long as the exchange is into the same fund and was initiated
at the discretion of Edward Jones. Edward Jones is responsible for any remaining Contingent Deferred Sales Charge (“CDSC”)
due to the fund company or its affiliate, if applicable. Any future purchases are subject to the applicable sales charge as disclosed
in the prospectus.
|
|
·
|
Exchanges from Class C shares to Class A shares of the same fund, generally, in the 84th month following the anniversary of
the purchase date or earlier at the discretion of Edward Jones.
|
CDSC Waivers
If the shareholder purchases shares that are subject to a CDSC
and those shares are redeemed before the CDSC is expired, the shareholder is responsible to pay the CDSC except in the following
conditions:
|
·
|
The death or disability of the shareholder.
|
|
·
|
Systematic withdrawals with up to 10% per year of the account value.
|
|
·
|
Return of excess contributions from an Individual Retirement Account (IRA).
|
|
·
|
Shares sold as part of a required minimum distribution for IRA and retirement accounts if the redemption is taken in or after
the year the shareholder reaches qualified age based on applicable IRS regulations.
|
|
·
|
Shares sold to pay Edward Jones fees or costs in such cases where the transaction is initiated by Edward Jones. Edward Jones
is responsible for any remaining CDSC due to the fund company or its affiliate, if applicable.
|
|
·
|
Shares exchanged in an Edward Jones fee-based program. Edward Jones is responsible for any remaining CDSC due to the fund company
or its affiliate, if applicable.
|
|
·
|
Shares acquired through NAV reinstatement.
|
|
·
|
Shares redeemed at the discretion of Edward Jones for Minimum Balances as described below.
|
******************************************************************************
Other Important Information Regarding Transactions Through Edward Jones
Minimum Purchase Amounts
|
·
|
Initial purchase minimum: $250
|
|
·
|
Subsequent purchase minimum: none
|
Minimum Balances
|
·
|
Edward Jones has the right to redeem at its discretion fund holdings with a balance of $250 or less. The following are examples
of accounts that are not included in this policy:
|
|
·
|
A fee-based account held on an Edward Jones platform
|
|
·
|
A 529 account held on an Edward Jones platform
|
|
·
|
An account with an active systematic investment plan or LOI
|
Exchanging Share Classes
At any time it deems necessary, Edward Jones has the authority to exchange
at NAV a shareholder's holdings in a fund to Class A shares of the same fund. Edward Jones is responsible for any remaining CDSC
due to the fund company or its affiliate, if applicable. Any future purchases are subject to the applicable sales charge as disclosed
in the prospectus.
March 1, 2021
|
37963 3.1.21
|
EATON VANCE STOCK FUND
Supplement to Statement
of Additional Information dated May 1, 2020
1. The following replaces the
first paragraph under “Fund Management.” in “Management and Organization”:
Fund Management.
The Trustees of the Trust are responsible for the overall management and supervision of the affairs
of the Trust. The Trustees of the Portfolio are responsible for the overall management and supervision of the Portfolio. The Board
members and officers of the Trust and Portfolio are listed below. Except as indicated, each individual has held the office shown
or other offices in the same company for the last five years. Board members hold indefinite terms of office. Each Trustee holds
office until his or her successor is elected and qualified, subject to a prior death, resignation, retirement, disqualification
or removal. Under the terms of the Fund’s and the Portfolio’s current Trustee retirement policy, an Independent
Trustee must retire and resign as a Trustee on the earlier of: (i) the first day of July following his or her 74th birthday; or
(ii), with limited exception, December 31st of the 20th year in which he or she has served as a Trustee. However, if such retirement
and resignation would cause the Fund or Portfolio to be out of compliance with Section 16 of the 1940 Act or any other regulations
or guidance of the SEC, then such retirement and resignation will not become effective until such time as action has been taken
for the Fund or Portfolio to be in compliance therewith. The “noninterested Trustees” consist of those Trustees
who are not “interested persons” of the Trust and the Portfolio, as that term is defined under the 1940 Act. The business
address of each Board member and officer is Two International Place, Boston, Massachusetts 02110. As used in this SAI, “EVC”
refers to Eaton Vance Corp., “EV” refers to Eaton Vance, Inc., “Eaton Vance” refers to Eaton Vance Management
and “EVD” refers to Eaton Vance Distributors, Inc. (see “Principal Underwriter” under “Other Service
Providers”). EV is the trustee of each of Eaton Vance and BMR. Effective March 1, 2021, each of Eaton Vance, BMR, EVD and
EV are indirect wholly-owned subsidiaries of Morgan Stanley. Each officer affiliated with Eaton Vance may hold a position with
other Eaton Vance affiliates that is comparable to his or her position with Eaton Vance listed below.
2. The following replaces the
Thomas E. Faust Jr. row in the Trustees table and in his biographical narrative in “Management and Organization”:
THOMAS E. FAUST JR.
1958
|
|
Trustee
|
|
Since 2007
|
|
Chairman of Morgan Stanley Investment Management, Inc. (MSIM), Director and President of EV, Chief Executive Officer and President of Eaton Vance and BMR, and Director of EVD. Formerly, Chairman, Chief Executive Officer and President of EVC. Trustee and/or officer of 141 registered investment companies. Mr. Faust is an interested person because of his positions with MSIM, BMR, Eaton Vance, EVD and EV, which are affiliates of the Trust and Portfolio, and his former position with EVC, which was an affiliate of the Trust and Portfolio prior to March 1, 2021.
|
|
141
|
|
Formerly, Director of EVC (2007-2021) and Hexavest Inc. (2012-2021) (investment management firm).
|
Thomas E. Faust
Jr. Mr. Faust has served as a member of the Eaton Vance Fund Boards since 2007. Effective March 1, 2021, he is Chairman
of MSIM. He is also Director and President of EV, Chief Executive Officer and President of Eaton Vance and BMR, and Director of
EVD. Mr. Faust previously served as Chairman and Chief Executive Officer of EVC from 2007 through March 1, 2021 and as President
of EVC from 2006 through March 1, 2021. Mr. Faust served as a Director of Hexavest Inc. from 2012-2021. From 2016 through 2019,
Mr. Faust served as a Director of SigFig Wealth Management LLC. Mr. Faust previously served as an equity analyst, portfolio manager,
Director of Equity Research and Management and Chief Investment Officer of Eaton Vance from 1985-2007. He holds B.S. degrees in
Mechanical Engineering and Economics from the Massachusetts Institute of Technology and an MBA from Harvard Business School. Mr.
Faust has been a Chartered Financial Analyst since 1988. He is a trustee and member of the executive committee of the Boston Symphony
Orchestra, Inc. and trustee emeritus of Wellesley College.
3. The following replaces the
first and second paragraphs under “Investment Advisory Services.” in “Investment Advisory and Administrative
Services”:
Investment Advisory
Services. As described in the Prospectus, upon the closing of the transaction by which Morgan Stanley acquired EVC (the
“Transaction”), the Fund and the Portfolio entered into a new investment advisory agreement with Eaton Vance or BMR,
as applicable. Each investment adviser manages the investments and affairs of the Portfolio and the Fund and provides related office
facilities and personnel subject to the supervision of the Trust's Board, in the case of the Fund, or the Portfolio’s Board.
Each investment adviser furnishes investment research, advice and supervision, furnishes an investment program and determines what
securities will be purchased, held or sold by the Portfolio and the Fund and what portion, if any, of the Portfolio’s, and
the Fund’s assets will be held uninvested. Each Investment Advisory Agreement requires the investment adviser to pay the
compensation and expenses of all officers and Trustees who are members of the investment adviser's organization and all personnel of the investment adviser performing
services relating to research and investment activities.
As described in the Prospectus, Eaton Vance serves as investment adviser
for the Fund effective March 1, 2021. For a description of the compensation that the Portfolio or the Fund pays the investment
adviser under its investment advisory agreement, see the Prospectus.
4. The following replaces the
last paragraph under “Investment Advisory Services.” in “Investment Advisory and Administrative Services”:
Each Investment Advisory Agreement with the investment adviser continues
in effect through and including the second anniversary of its execution and shall continue in full force and effect indefinitely
thereafter, but only so long as such continuance after such second anniversary is specifically approved at least annually (i) by
the vote of a majority of the noninterested Trustees of the Trust, in the case of the Fund, or the Portfolio, in the case of the
Portfolio, cast in person at a meeting specifically called for the purpose of voting on such approval and (ii) by the Board of
the Trust, in the case of the Fund, or the Portfolio, in the case of the Portfolio, or by vote of a majority of the outstanding
voting securities of the Portfolio or Fund. Each Agreement may be terminated at any time without penalty on sixty (60) days’
written notice by either party, or by vote of the majority of the outstanding voting securities of the Portfolio or Fund, and each
Agreement will terminate automatically in the event of its assignment. Each Agreement provides that the investment adviser
may render services to others. Each Agreement also provides that the investment adviser shall not be liable for any loss incurred
in connection with the performance of its duties, or action taken or omitted under the Agreement, in the absence of willful misfeasance,
bad faith, gross negligence or reckless disregard of its obligations and duties thereunder, or for any losses sustained in the
acquisition, holding or disposition of any security or other investment. Each Agreement is not intended to, and does not, confer
upon any person not a party to it any right, benefit or remedy of any nature.
5. The following replaces “Information
About BMR and Eaton Vance.” in “Investment Advisory and Administrative Services”:
Information About
BMR and Eaton Vance. BMR and Eaton Vance are business trusts organized under the laws of the Commonwealth of Massachusetts.
EV serves as trustee of BMR and Eaton Vance. As described in the Prospectus, following the closing of the Transaction on March
1, 2021, EV, Eaton Vance and BMR became indirect wholly-owned subsidiaries of Morgan Stanley (NYSE: MS), a preeminent global financial
services firm engaged in securities trading and brokerage activities, as well as providing investment banking, research and analysis,
financing and financial advisory services.
Prior to March 1, 2021, EV and Eaton Vance were wholly-owned subsidiaries
of EVC, a Maryland corporation and publicly-held holding company and BMR was an indirect wholly owned subsidiary of EVC. EVC through
its subsidiaries and affiliates engaged primarily in investment management, administration and marketing activities. The Directors
of EVC were Thomas E. Faust Jr., Ann E. Berman, Leo I. Higdon, Jr., Paula A. Johnson, Brian D. Langstraat, Dorothy E. Puhy, Winthrop
H. Smith, Jr. and Richard A. Spillane, Jr. All shares of the outstanding Voting Common Stock of EVC were deposited in a Voting
Trust, the Voting Trustees of which were Mr. Faust, Paul W. Bouchey, Craig R. Brandon, Daniel C. Cataldo, Michael A. Cirami, Cynthia
J. Clemson, James H. Evans, Maureen A. Gemma, Laurie G. Hylton, Mr. Langstraat, Thomas Lee, Frederick S. Marius, David C. McCabe,
Edward J. Perkin, Lewis R. Piantedosi, Charles B. Reed, Craig P. Russ, Thomas C. Seto, John L. Shea, Eric A. Stein, John H. Streur,
Andrew N. Sveen, Payson F. Swaffield, R. Kelly Williams and Matthew J. Witkos (all of whom are or were officers of Eaton Vance
or its affiliates). The Voting Trustees had unrestricted voting rights for the election of Directors of EVC. Prior to March 1,
2021, all of the outstanding voting trust receipts issued under said Voting Trust were owned by certain of the officers of BMR
and Eaton Vance who may also have been officers, or officers and Directors of EVC and EV. As indicated under “Management
and Organization,” all of the officers of the Trust (as well as Mr. Faust who is also a Trustee) are employees of Eaton Vance
and/or BMR.
6. The following replaces “Compensation
Structure for Eaton Vance and BMR.” and “Method to Determine Compensation.” under “Portfolio Managers.”
in “Investment Advisory and Administrative Services”:
Compensation Structure
for Eaton Vance and BMR. Compensation of the investment adviser's portfolio managers and other investment professionals
has the following primary components: (1) a base salary, (2) an annual cash bonus, and (3) annual non-cash compensation consisting
of restricted shares of Morgan Stanley nonvoting common stock that are subject to a fixed vesting and distribution schedule. The
investment adviser’s investment professionals also receive certain retirement, insurance and other benefits that are broadly
available to the investment adviser’s employees. Compensation of the investment adviser’s investment professionals
is reviewed primarily on an annual basis. Cash bonuses, stock-based compensation awards, and adjustments in base salary are typically
paid or put into effect at or shortly after the December 31st fiscal year end of Morgan Stanley.
Method to Determine
Compensation. The investment adviser compensates its portfolio managers based primarily on the scale and complexity
of their portfolio responsibilities and the total return performance of managed funds and accounts versus the benchmark(s) stated
in the prospectus, as well as an appropriate peer group (as described below). In addition to rankings within peer groups of funds
on the basis of absolute performance, consideration may also be given to relative risk-adjusted performance. Risk-adjusted performance
measures include, but are not limited to, the Sharpe ratio, which uses standard deviation and excess return to determine reward
per unit of risk. Performance is normally based on periods ending on the September 30th preceding fiscal year end. Fund performance
is normally evaluated primarily versus peer groups of funds as determined by Lipper Inc. and/or Morningstar, Inc. When a fund’s
peer group as determined by Lipper or Morningstar is deemed by the investment adviser’s management not to provide a fair
comparison, performance may instead be evaluated primarily against a custom peer group or market index. In evaluating the performance
of a fund and its manager, primary emphasis is normally placed on three-year performance, with secondary consideration of performance
over longer and shorter periods. For funds that are tax-managed or otherwise have an objective of after-tax returns, performance
is measured net of taxes. For other funds, performance is evaluated on a pre-tax basis. For funds with an investment objective
other than total return (such as current income), consideration will also be given to the fund’s success in achieving its
objective. For managers responsible for multiple funds and accounts, investment performance is evaluated on an aggregate basis,
based on averages or weighted averages among managed funds and accounts. Funds and accounts that have performance-based advisory
fees are not accorded disproportionate weightings in measuring aggregate portfolio manager performance.
The compensation of portfolio managers with other job responsibilities (such
as heading an investment group or providing analytical support to other portfolios) will include consideration of the scope of
such responsibilities and the managers’ performance in meeting them.
The investment adviser seeks to compensate portfolio managers commensurate
with their responsibilities and performance, and competitive with other firms within the investment management industry. The investment
adviser participates in investment-industry compensation surveys and utilizes survey data as a factor in determining salary, bonus
and stock-based compensation levels for portfolio managers and other investment professionals. Salaries, bonuses and stock-based
compensation are also influenced by the operating performance of the investment adviser and Morgan Stanley. The overall annual
cash bonus pool is generally based on a substantially fixed percentage of pre-bonus adjusted operating income. While the salaries
of the investment adviser’s portfolio managers are comparatively fixed, cash bonuses and stock-based compensation may fluctuate
significantly from year to year, based on changes in manager performance and other factors as described herein. For a high performing
portfolio manager, cash bonuses and stock-based compensation may represent a substantial portion of total compensation.
7. The following replaces the
first two paragraphs in “Other Service Providers”:
Principal Underwriter.
Eaton Vance Distributors, Inc. (“EVD”), Two International Place, Boston, MA 02110 is
the principal underwriter of the Fund. The principal underwriter acts as principal in selling shares under a Distribution Agreement
with the Trust. The expenses of printing copies of prospectuses used to offer shares and other selling literature and of advertising
are borne by the principal underwriter. The fees and expenses of qualifying and registering and maintaining qualifications and
registrations of the Fund and its shares under federal and state securities laws are borne by the Fund. The Distribution Agreement
is renewable annually by the members of the Board (including a majority of the noninterested Trustees who have no direct or indirect
financial interest in the operation of the Distribution Agreement or any applicable Distribution Plan), may be terminated on sixty
days’ notice either by such Trustees or by vote of a majority of the outstanding Fund shares or on six months’ notice
by the principal underwriter and is automatically terminated upon assignment. The principal underwriter distributes shares on a
“best efforts” basis under which it is required to take and pay for only such shares as may be sold. Effective March
1, 2021, EVD is an indirect wholly-owned subsidiary of Morgan Stanley. Prior to March 1, 2021, EVD was a direct, wholly-owned subsidiary
of EVC. Mr. Faust is also a Director of EVD. EVD also serves as placement agent for the Portfolio, if applicable.
Custodian.
State Street Bank and Trust Company (“State Street”), State Street Financial Center,
One Lincoln Street, Boston, MA 02111, serves as custodian to the Fund and Portfolio, if applicable. State Street has custody of
all cash and securities representing the Fund’s interest in the Portfolio, has custody of the Portfolio’s and
the Fund's assets, maintains the general ledger of the Portfolio and the Fund and computes the daily net asset value of interests
in the Portfolio and the net asset value of shares of the Fund. In such capacity it attends to details in connection with the sale,
exchange, substitution, transfer or other dealings with the Fund's and the Portfolio’s investments, receives and disburses
all funds and performs various other ministerial duties upon receipt of proper instructions from the Trust and the Portfolio. State
Street also provides services in connection with the preparation of shareholder reports and the electronic filing of such reports
with the SEC.
8. The following replaces the
first, second, fourth, sixth and seventh paragraphs in “Portfolio Securities Transactions”:
Decisions concerning the execution of portfolio security transactions,
including the selection of the market and the broker-dealer firm or other financial intermediary (each an “intermediary”),
are made by the investment adviser. The Fund and the Portfolio are responsible for the expenses associated with its portfolio transactions.
The investment adviser is also responsible for the execution of transactions for all other accounts managed by it. The investment
adviser places the portfolio security transactions for execution with one or more intermediaries firms. The investment adviser
uses its best efforts to obtain execution of portfolio security transactions at prices that, in the investment adviser’s
judgment, are advantageous to the client and at a reasonably competitive spread or (when a disclosed commission is being charged)
at reasonably competitive commission rates. In seeking such execution, the investment adviser will use its best judgment in evaluating
the terms of a transaction, and will give consideration to various relevant factors, which may include, without limitation, the
full range and quality of the intermediary’s services, responsiveness of the intermediary to the investment adviser, the
size and type of the transaction, the nature and character of the market for the security, the confidentiality, speed and certainty
of effective execution required for the transaction, the general execution and operational capabilities of the intermediary, the
reputation, reliability, experience and financial condition of the intermediary, the value and quality of the services rendered
by the intermediary in this and other transactions, and the amount of the spread or commission, if any. In addition, the investment
adviser may consider the receipt of Research Services (as defined below), provided it does not compromise the investment adviser’s
obligation to seek best overall execution for the Fund or Portfolio and is otherwise in compliance with applicable law. The investment
adviser may engage in portfolio transactions with an intermediary that sells shares of Eaton Vance funds, provided such transactions
are not directed to that intermediary as compensation for the promotion or sale of such shares.
As described in the Prospectus, following the closing of the Transaction
on March 1, 2021, the investment adviser became an “affiliated person,” as defined in the 1940 Act, of Morgan Stanley
and its affiliates, including certain intermediaries (as previously defined). As a result, the investment adviser is subject to
certain restrictions regarding transactions with Morgan Stanley-affiliated intermediaries, as set forth in the 1940 Act. Under
certain circumstances, such restrictions may limit the investment adviser’s ability to place portfolio transactions on behalf
of a Fund or Portfolio at the desired time or price. Any transaction the investment adviser enters into with a Morgan Stanley-affiliated
intermediary on behalf of a Fund or Portfolio will be done in compliance with applicable laws, rules, and regulations; will be
subject to any restrictions contained in a Fund’s or Portfolio’s investment advisory agreement; will be subject to
the investment adviser’s duty to seek best execution; and, will comply with any applicable policies and procedures of the
investment adviser, as described below.
Subject to the overriding objective of obtaining the best execution of
orders and applicable rules and regulations, as described above, a Fund or Portfolio may use an affiliated intermediary, including
a Morgan Stanley-affiliated intermediary, to effect Fund or Portfolio portfolio transactions, including transactions in futures
contracts and options on futures contracts, under procedures adopted by the Board. In order to use such affiliated intermediaries,
the Fund’s or Portfolio’s Board must approve and periodically review procedures reasonably designed to ensure that
commission rates and other remuneration paid to the affiliated intermediaries are fair and reasonable in comparison to those of
other intermediaries for comparable transactions involving similar securities being purchased or sold during a comparable time
period.
Pursuant to an order issued by the SEC, a Fund or Portfolio is permitted
to engage in principal transactions in money market instruments, subject to certain conditions, with Morgan Stanley & Co. LLC,
a broker-dealer affiliated with Morgan Stanley.
Transactions on stock exchanges and other agency transactions involve the
payment of negotiated brokerage commissions. Such commissions vary among different broker-dealer firms, and a particular broker-dealer
may charge different commissions according to such factors as the difficulty and size of the transaction and the volume of business
done with such broker-dealer. Transactions in foreign securities often involve the payment of brokerage commissions, which may
be higher than those in the United States. There is generally no stated commission in the case of securities traded in the over-the-counter
markets including transactions in fixed-income securities which are generally purchased and sold on a net basis (i.e., without
commission) through intermediaries and banks acting for their own account rather than as brokers. Such intermediaries attempt to
profit from such transactions by buying at the bid price and selling at the higher asked price of the market for such obligations,
and the difference between the bid and asked price is customarily referred to as the spread. Fixed-income transactions may also
be transacted directly with the issuer of the obligations. In an underwritten offering the price paid often includes a disclosed
fixed commission or discount retained by the underwriter or dealer. Although spreads or commissions paid on portfolio security
transactions will, in the judgment of the investment adviser, be reasonable in relation to the value of the services provided,
commissions exceeding those which another firm might charge may be paid to intermediaries who were selected to execute transactions
on behalf of the investment adviser’s clients in part for providing brokerage and research services to the investment adviser
as permitted by applicable law.
Research Services provided by (and produced by) broker-dealers that execute
portfolio transactions or from affiliates of executing broker-dealers are referred to as “Proprietary Research.” Except
for trades executed in jurisdictions where such consideration is not permissible, the investment adviser may and does consider
the receipt of Proprietary Research Services as a factor in selecting broker dealers to execute client portfolio transactions,
provided it does not compromise the investment adviser’s obligation to seek best overall execution. In jurisdictions where
permissible, the investment adviser also may consider the receipt of Research Services under so called “client commission
arrangements” or “commission sharing arrangements” (both referred to as “CCAs”) as a factor in selecting
broker dealers to execute transactions, provided it does not compromise the investment adviser’s obligation to seek best
overall execution. Under a CCA arrangement, the investment adviser may cause client accounts to effect transactions through a broker-dealer
and request that the broker-dealer allocate a portion of the commissions paid on those transactions to a pool of commission credits
that are paid to other firms that provide Research Services to the investment adviser. Under a CCA, the broker-dealer that provides
the Research Services need not execute the trade. Participating in CCAs may enable the investment adviser to consolidate payments
for research using accumulated client commission credits from transactions executed through a particular broker-dealer to periodically
pay for Research Services obtained from and provided by other firms, including other broker-dealers that supply Research Services.
The investment adviser believes that CCAs offer the potential to optimize the execution of trades and the acquisition of a variety
of high quality Research Services that the investment adviser might not be provided access to absent CCAs. The investment adviser
may enter into CCA arrangements with a number of broker-dealers and other firms, including certain affiliates of the investment
adviser. The investment adviser will only enter into and utilize CCAs to the extent permitted by Section 28(e) and other applicable
law.
The investment companies sponsored by the investment adviser or certain
of its affiliates also may allocate brokerage commissions to acquire information relating to the
performance, fees and expenses of such companies and other investment companies, which information is used by the members
of the Board of such companies to fulfill their responsibility to oversee the quality of the services provided to various entities,
including the investment adviser, to such companies. Such companies may also pay cash for such information.
Securities considered as investments for
the Fund and Portfolio may also be appropriate for other investment accounts managed by the investment adviser or certain of its
affiliates. Whenever decisions are made to buy or sell securities by the Fund or Portfolio and one or more of such other accounts
simultaneously, the investment adviser will allocate the security transactions (including “new” issues) in a manner
which it believes to be equitable under the circumstances. As a result of such allocations, there may be instances where the Fund
or Portfolio will not participate in a transaction that is allocated among other accounts. If an aggregated order cannot be filled
completely, allocations will generally be made on a pro rata basis. An order may not be allocated on a pro rata basis where, for
example: (i) consideration is given to portfolio managers who have been instrumental in developing or negotiating a particular
investment; (ii) consideration is given to an account with specialized investment policies that coincide with the particulars of
a specific investment; (iii) pro rata allocation would result in odd-lot or de minimis amounts being allocated to a portfolio or
other client; or (iv) where the investment adviser reasonably determines that departure from a pro rata allocation is advisable.
While these aggregation and allocation policies could have a detrimental effect on the price or amount of the securities available
to the Fund or Portfolio from time to time, it is the opinion of the members of the Board that the benefits from the investment
adviser organization outweigh any disadvantage that may arise from exposure to simultaneous transactions.
9. The following is added as
a new section immediately prior to “Financial Statements”:
POTENTIAL CONFLICTS OF INTEREST
As a diversified global financial services firm, Morgan Stanley, the parent
company of the investment adviser, engages in a broad spectrum of activities, including financial advisory services, investment
management activities, lending, commercial banking, sponsoring and managing private investment funds, engaging in broker-dealer
transactions and principal securities, commodities and foreign exchange transactions, research publication and other activities.
In the ordinary course of its business, Morgan Stanley is a full-service investment banking and financial services firm and therefore
engages in activities where Morgan Stanley’s interests or the interests of its clients may conflict with the interests of
a Fund or Portfolio, if applicable, (collectively for the purposes of this section, “Fund” or “Funds”).
Morgan Stanley advises clients and sponsors, manages or advises other investment funds and investment programs, accounts and businesses
(collectively, together with the Funds, any new or successor funds, programs, accounts or businesses, the ‘‘Affiliated
Investment Accounts’’) with a wide variety of investment objectives that in some instances may overlap or conflict
with a Fund’s investment objectives and present conflicts of interest. In addition, Morgan Stanley may also from time to
time create new or successor Affiliated Investment Accounts that may compete with a Fund and present similar conflicts of interest.
The discussion below enumerates certain actual, apparent and potential conflicts of interest. There is no assurance that conflicts
of interest will be resolved in favor of Fund shareholders and, in fact, they may not be. Conflicts of interest not described below
may also exist.
Material Non-public
and Other Information. It is expected that confidential or material non-public information regarding an investment or potential
investment opportunity may become available to the investment adviser. If such information becomes available, the investment adviser
may be precluded (including by applicable law or internal policies or procedures) from pursuing an investment or disposition opportunity
with respect to such investment or investment opportunity.
The investment adviser may also from time to time be subject to contractual
‘‘stand-still’’ obligations and/or confidentiality obligations that may restrict its ability to trade in
certain investments on a Fund’s behalf. In addition, the investment adviser may be precluded from disclosing such information
to an investment team, even in circumstances in which the information would be beneficial if disclosed. Therefore, the investment
team may not be provided access to material non-public information in the possession of Morgan Stanley that might be relevant to
an investment decision to be made on behalf of a Fund, and the investment team may initiate a transaction or sell an investment
that, if such information had been known to it, may not have been undertaken. In addition, certain members of the investment team
may be recused from certain investment-related discussions so that such members do not receive information that would limit their
ability to perform functions of their employment with the investment adviser or its affiliates unrelated to that of a Fund. Furthermore,
access to certain parts of Morgan Stanley may be subject to third party confidentiality obligations and to information barriers
established by Morgan Stanley in order to manage potential conflicts of interest and regulatory restrictions, including without
limitation joint transaction restrictions pursuant to the 1940 Act. Accordingly, the investment adviser’s ability to source
investments from other business units within Morgan Stanley may be limited and there can be no assurance that the investment adviser
will be able to source any investments from any one or more parts of the Morgan Stanley network.
The investment adviser may restrict its investment decisions and activities
on behalf of the Funds in various circumstances, including because of applicable regulatory requirements or information held by
the investment adviser or Morgan Stanley. The investment adviser might not engage in transactions or other activities for, or enforce
certain rights in favor of, a Fund due to Morgan Stanley’s activities outside the Funds. In instances where trading of an
investment is restricted, the investment adviser may not be able to purchase or sell such investment on behalf of a Fund, resulting
in the Fund’s inability to participate in certain desirable transactions. This inability to buy or sell an investment could
have an adverse effect on a Fund’s portfolio due to, among other things, changes in an investment’s value during the
period its trading is restricted. Also, in situations where the investment adviser is required to aggregate its positions with
those of other Morgan Stanley business units for position limit calculations, the investment adviser may have to refrain from making
investments due to the positions held by other Morgan Stanley business units or their clients. There may be other situations where
the investment adviser refrains from making an investment due to additional disclosure obligations, regulatory requirements, policies,
and reputational risk, or the investment adviser may limit purchases or sales of securities in respect of which Morgan Stanley
is engaged in an underwriting or other distribution capacity.
Morgan Stanley has established certain information barriers and other
policies to address the sharing of information between different businesses within Morgan Stanley. As a result of information barriers,
the investment adviser generally will not have access, or will have limited access, to certain information and personnel in other
areas of Morgan Stanley relating to business transactions for clients (including transactions in investing, banking, prime brokerage
and certain other areas), and generally will not manage the Funds with the benefit of the information held by such other areas.
Morgan Stanley, due to its access to and knowledge of funds, markets and securities based on its prime brokerage and other businesses,
may make decisions based on information or take (or refrain from taking) actions with respect to interests in investments of the
kind held (directly or indirectly) by the Funds in a manner that may be adverse to the Funds, and will not have any obligation
or other duty to share information with the investment adviser.
In limited circumstances, however, including for purposes of managing
business and reputational risk, and subject to policies and procedures, Morgan Stanley personnel, including personnel of the investment
adviser, on one side of an information barrier may have access to information and personnel on the other side of the information
barrier through “wall crossings.” The investment adviser faces conflicts of interest in determining whether to engage
in such wall crossings. Information obtained in connection with such wall crossings may limit or restrict the ability of the investment
adviser to engage in or otherwise effect transactions on behalf of the Funds (including purchasing or selling securities that the
investment adviser may otherwise have purchased or sold for a Fund in the absence of a wall crossing). In managing conflicts of
interest that arise because of the foregoing, the investment adviser generally will be subject to fiduciary requirements. The investment
adviser may also implement internal information barriers or ethical walls, and the conflicts described herein with respect to information
barriers and otherwise with respect to Morgan Stanley and the investment adviser will also apply internally within the investment
adviser. As a result, a Fund may not be permitted to transact in (e.g., dispose of a security in whole or in part) during periods
when it otherwise would have been able to do so, which could adversely affect a Fund. Other investors in the security that are
not subject to such restrictions may be able to transact in the security during such periods. There may also be circumstances in
which, as a result of information held by certain portfolio management teams in the investment adviser, the investment adviser
limits an activity or transaction for a Fund, including if the Fund is managed by a portfolio management team other than the team
holding such information.
Investments by Morgan
Stanley and its Affiliated Investment Accounts. In serving in multiple capacities to Affiliated Investment Accounts, Morgan
Stanley, including the investment adviser and its investment teams, may have obligations to other clients or investors in Affiliated
Investment Accounts, the fulfillment of which may not be in the best interests of a Fund or its shareholders. A Fund’s investment
objectives may overlap with the investment objectives of certain Affiliated Investment Accounts. As a result, the members of an
investment team may face conflicts in the allocation of suitable investment opportunities among a Fund and other investment funds,
programs, accounts and businesses advised by or affiliated with the investment adviser. Certain Affiliated Investment Accounts
may provide for higher management or incentive fees or greater expense reimbursements or overhead allocations, all of which may
contribute to this conflict of interest and create an incentive for the investment adviser to favor such other accounts.
Morgan Stanley currently invests and plans to continue to invest on its
own behalf and on behalf of its Affiliated Investment Accounts in a wide variety of investment opportunities globally. Morgan Stanley
and its Affiliated Investment Accounts, to the extent consistent with applicable law and policies and procedures, will be permitted
to invest in investment opportunities without making such opportunities available to a Fund beforehand. Subject to the foregoing,
Morgan Stanley may offer investments that fall into the investment objectives of an Affiliated Investment Account to such account
or make such investment on its own behalf, even though such investment also falls within a Fund’s investment objectives.
A Fund may invest in opportunities that Morgan Stanley and/or one or more Affiliated Investment Accounts has declined, and vice
versa. All of the foregoing may reduce the number of investment opportunities available to a Fund and may create conflicts of interest
in allocating investment opportunities. Investors should note that the conflicts inherent in making such allocation decisions may
not always be resolved to a Fund’s advantage. There can be no assurance that a Fund will have an opportunity to participate
in certain opportunities that fall within their investment objectives.
To seek to reduce potential conflicts of interest and to attempt to allocate
such investment opportunities in a fair and equitable manner, the investment adviser has implemented allocation policies and procedures.
These policies and procedures are intended to give all clients of the investment adviser, including the Funds, fair access to investment
opportunities consistent with the requirements of organizational documents, investment strategies, applicable laws and regulations,
and the fiduciary duties of the investment adviser. Each client of the investment adviser that is subject to the allocation policies
and procedures, including each Fund, is assigned an investment team and portfolio manager(s) by the investment adviser. The investment
team and portfolio managers review investment opportunities and will decide with respect to the allocation of each opportunity
considering various factors and in accordance with the allocation policies and procedures. The allocation policies and procedures
are subject to change. Investors should note that the conflicts inherent in making such allocation decisions may not always be
resolved to the advantage of a Fund.
It is possible that Morgan Stanley or an Affiliated Investment Account,
including another Eaton Vance fund, will invest in or advise a company that is or becomes a competitor of a company of which a
Fund holds an investment. Such investment could create a conflict between the Fund, on the one hand, and Morgan Stanley or the
Affiliated Investment Account, on the other hand. In such a situation, Morgan Stanley may also have a conflict in the allocation
of its own resources to the portfolio investment. Furthermore, certain Affiliated Investment Accounts will be focused primarily
on investing in other funds which may have strategies that overlap and/or directly conflict and compete with a Fund.
In addition, certain investment professionals who are involved in a Fund’s
activities remain responsible for the investment activities of other Affiliated Investment Accounts managed by the investment adviser
and its affiliates, and they will devote time to the management of such investments and other newly created Affiliated Investment
Accounts (whether in the form of funds, separate accounts or other vehicles), as well as their own investments. In addition, in
connection with the management of investments for other Affiliated Investment Accounts, members of Morgan Stanley and its affiliates
may serve on the boards of directors of or advise companies which may compete with a Fund’s portfolio investments. Moreover,
these Affiliated Investment Accounts managed by Morgan Stanley and its affiliates may pursue investment opportunities that may
also be suitable for a Fund.
It should be noted that Morgan Stanley may, directly or indirectly, make
large investments in certain of its Affiliated Investment Accounts, and accordingly Morgan Stanley’s investment in a Fund
may not be a determining factor in the outcome of any of the foregoing conflicts. Nothing herein restricts or in any way limits
the activities of Morgan Stanley, including its ability to buy or sell interests in, or provide financing to, equity and/or debt
instruments, funds or portfolio companies, for its own accounts or for the accounts of Affiliated Investment Accounts or other
investment funds or clients in accordance with applicable law.
Different clients of the investment adviser, including a Fund, may invest
in different classes of securities of the same issuer, depending on the respective clients’ investment objectives and policies.
As a result, the investment adviser and its affiliates, at times, will seek to satisfy fiduciary obligations to certain clients
owning one class of securities of a particular issuer by pursuing or enforcing rights on behalf of those clients with respect to
such class of securities, and those activities may have an adverse effect on another client which owns a different class of securities
of such issuer. For example, if one client holds
debt securities of an issuer and another client holds equity securities
of the same issuer, if the issuer experiences financial or operational challenges, the investment adviser and its affiliates may
seek a liquidation of the issuer on behalf of the client that holds the debt securities, whereas the client holding the equity
securities may benefit from a reorganization of the issuer. Thus, in such situations, the actions taken by the investment adviser
or its affiliates on behalf of one client can negatively impact securities held by another client. These conflicts also exist as
between the investment adviser’s clients, including the Funds, and the Affiliated Investment Accounts managed by Morgan Stanley.
The investment adviser and its affiliates may give advice and recommend
securities to other clients which may differ from advice given to, or securities recommended or bought for, a Fund even though
such other clients’ investment objectives may be similar to those of the Fund.
The investment adviser and its affiliates manage long and short portfolios.
The simultaneous management of long and short portfolios creates conflicts of interest in portfolio management and trading in that
opposite directional positions may be taken in client accounts managed by the same investment team, and creates risks such as:
(i) the risk that short sale activity could adversely affect the market value of long positions in one or more portfolios (and
vice versa) and (ii) the risks associated with the trading desk receiving opposing orders in the same security simultaneously.
The investment adviser and its affiliates have adopted policies and procedures that are reasonably designed to mitigate these conflicts.
In certain circumstances, the investment adviser invest on behalf of itself in securities and other instruments that would be appropriate
for, held by, or may fall within the investment guidelines of its clients, including a Fund. At times, the investment adviser will
give advice or take action for its own accounts that differs from, conflicts with, or is adverse to advice given or action taken
for any client.
From time to time, conflicts also arise due to the fact that certain securities
or instruments maybe held in some client accounts, including a Fund, but not in others, or the client accounts may have different
levels of holdings in certain securities or instruments, and because the accounts pay different levels of fees to the investment
adviser. In addition, at times an investment adviser investment team will give advice or take action with respect to the investments
of one or more clients that is not given or taken with respect to other clients with similar investment programs, objectives, and
strategies. Accordingly, clients with similar strategies will not always hold the same securities or instruments or achieve the
same performance. The investment adviser’s investment teams also advise clients with conflicting programs, objectives or
strategies. These conflicts also exist as between the investment adviser’s clients, including the Funds, and the Affiliated
Investment Accounts managed by Morgan Stanley.
The investment adviser maintains separate trading desks by investment
team and generally based on asset class, including two trading desks trading equity securities. These trading desks operate independently
of one another. The two equity trading desks do not share information. The separate equity trading desks may result in one desk
competing against the other desk when implementing buy and sell transactions, possibly causing certain accounts to pay more or
receive less for a security than other accounts. In addition, Morgan Stanley and its affiliates maintain separate trading desks
that operate independently of each other and do not share information with the investment adviser. The Morgan Stanley and affiliate
trading desks may compete against the investment adviser trading desks when implementing buy and sell transactions, possibly causing
certain Affiliated Investment Accounts to pay more or receive less for a security than other Affiliated Investment Accounts.
Payments to Broker-Dealers
and Other Financial Intermediaries. The investment adviser and/or EVD may pay compensation, out of their own funds and not
as an expense of the Funds, to certain financial intermediaries (which may include affiliates of the investment adviser and EVD),
including recordkeepers and administrators of various deferred compensation plans, in connection with the sale, distribution, marketing
and retention of shares of the Funds and/or shareholder servicing. For example, the investment adviser or EVD may pay additional
compensation to a financial intermediary for, among other things, promoting the sale and distribution of Fund shares, providing
access to various programs, mutual fund platforms or preferred or recommended mutual fund lists that may be offered by a financial
intermediary, granting EVD access to a financial intermediary’s financial advisors and consultants, providing assistance
in the ongoing education and training of a financial intermediary’s financial personnel, furnishing marketing support, maintaining
share balances and/or for sub-accounting, recordkeeping, administrative, shareholder or transaction processing services. Such payments
are in addition to any distribution fees, shareholder servicing fees and/or transfer agency fees that may be payable by the Funds.
The additional payments may be based on various factors, including level of sales (based on gross or net sales or some specified
minimum sales or some other similar criteria related to sales of the Funds and/or some or all other Eaton Vance funds), amount
of assets invested by the financial intermediary’s customers (which could include current or aged assets of the Funds and/or
some or all other Eaton Vance funds), a Fund’s advisory fee, some other agreed upon amount or other measures as determined
from time to time by the investment adviser and/or EVD. The amount of these payments may be different for different financial intermediaries.
The prospect of receiving, or the receipt of, additional compensation,
as described above, by financial intermediaries may provide such financial intermediaries and their financial advisors and other
salespersons with an incentive to favor sales of shares of the Funds over other investment options with respect to which these
financial intermediaries do not receive additional compensation (or receives lower levels of additional compensation). These payment
arrangements, however, will not change the price that an investor pays for shares of the Funds or the amount that the Funds receive
to invest on behalf of an investor. Investors may wish to take such payment arrangements into account when considering and evaluating
any recommendations relating to Fund shares and should review carefully any disclosures provided by financial intermediaries as
to their compensation.
Morgan Stanley Trading
and Principal Investing Activities. Notwithstanding anything to the contrary herein, Morgan Stanley will generally conduct
its sales and trading businesses, publish research and analysis, and render investment advice without regard for a Fund’s
holdings, although these activities could have an adverse impact on the value of one or more of the Fund’s investments, or
could cause Morgan Stanley to have an interest in one or more portfolio investments that is different from, and potentially adverse
to that of a Fund. Furthermore, from time to time, the investment adviser or its affiliates may invest “seed” capital
in a Fund, typically to enable the Fund to commence investment operations and/or achieve sufficient scale. The investment adviser
and its affiliates may hedge such seed capital exposure by investing in derivatives or other instruments expected to produce offsetting
exposure. Such hedging transactions, if any, would occur outside of a Fund.
Morgan Stanley’s sales and trading, financing and principal investing
businesses (whether or not specifically identified as such, and including Morgan Stanley’s trading and principal investing
businesses) will not be required to offer any investment opportunities to a Fund. These businesses may encompass, among other things,
principal trading activities as well as principal investing.
Morgan Stanley’s sales and trading, financing and principal investing
businesses have acquired or invested in, and in the future may acquire or invest in, minority and/or majority control positions
in equity or debt instruments of diverse public and/or private companies. Such activities may put Morgan Stanley in a position
to exercise contractual, voting or creditor rights, or management or other control with respect to securities or loans of portfolio
investments or other issuers, and in these instances Morgan Stanley may, in its discretion and subject to applicable law, act to
protect its own interests or interests of clients, and not a Fund’s interests.
Subject to the limitations of applicable law, a Fund may purchase from
or sell assets to, or make investments in, companies in which Morgan Stanley has or may acquire an interest, including as an owner,
creditor or counterparty.
Morgan Stanley’s
Investment Banking Activities. Morgan Stanley advises clients on a variety of mergers, acquisitions, restructuring, bankruptcy
and financing transactions. Morgan Stanley may act as an advisor to clients, including other investment funds that may compete
with a Fund and with respect to investments that a Fund may hold. Morgan Stanley may give advice and take action with respect to
any of its clients or proprietary accounts that may differ from the advice given, or may involve an action of a different timing
or nature than the action taken, by a Fund. Morgan Stanley may give advice and provide recommendations to persons competing with
a Fund and/or any of a Fund’s investments that are contrary to the Fund’s best interests and/or the best interests
of any of its investments.
Morgan Stanley could be engaged in financial advising, whether on the
buy-side or sell-side, or in financing or lending assignments that could result in Morgan Stanley’s determining in its discretion
or being required to act exclusively on behalf of one or more third parties, which could limit a Fund’s ability to transact
with respect to one or more existing or potential investments. Morgan Stanley may have relationships with third-party funds, companies
or investors who may have invested in or may look to invest in portfolio companies, and there could be conflicts between a Fund’s
best interests, on the one hand, and the interests of a Morgan Stanley client or counterparty, on the other hand.
To the extent that Morgan Stanley advises creditor or debtor companies
in the financial restructuring of companies either prior to or after filing for protection under Chapter 11 of the U.S. Bankruptcy
Code or similar laws in other jurisdictions, the investment adviser’s flexibility in making investments in such restructurings
on a Fund’s behalf may be limited. Morgan Stanley could provide investment banking services to competitors of portfolio companies,
as well as to private equity and/or private credit funds; such activities may present Morgan Stanley with a conflict of interest
vis-a-vis a Fund’s investment and may also result in a conflict in respect of the allocation of investment banking resources
to portfolio companies.
To the extent permitted by applicable law, Morgan Stanley may provide
a broad range of financial services to companies in which a Fund invests, including strategic and financial advisory services,
interim acquisition financing and other lending and underwriting or placement of securities, and Morgan Stanley generally will
be paid fees (that may include warrants or other securities) for such services. Morgan Stanley will not share any of the foregoing
interest, fees and other compensation received by it (including, for the avoidance of doubt, amounts received by the investment
adviser) with a Fund, and any advisory fees payable will not be reduced thereby.
Morgan Stanley may be engaged to act as a financial advisor to a company
in connection with the sale of such company, or subsidiaries or divisions thereof, may represent potential buyers of businesses
through its mergers and acquisition activities and may provide lending and other related financing services in connection with
such transactions. Morgan Stanley’s compensation for such activities is usually based upon realized consideration and is
usually contingent, in substantial part, upon the closing of the transaction. Under these circumstances, a Fund may be precluded
from participating in a transaction with or relating to the company being sold or participating in any financing activity related
to merger or acquisition.
To meet applicable regulatory requirements, there are periods when the
investment adviser will not engage in certain types of transactions in the securities of companies for which a broker-dealer affiliated
with Morgan Stanley is performing investment banking services. Fund shareholders will not receive notice of such instances. In
particular, when a broker-dealer affiliated with Morgan Stanley is engaged in an underwriting or other distribution of securities
of a company, the investment adviser may be prohibited from purchasing such securities on behalf of a Fund. In addition, under
certain circumstances, the investment adviser generally will not initiate transactions in the securities of companies with respect
to which affiliates of the investment adviser may have controlling interests or are affiliated.
The investment adviser believes that the nature and range of clients to
whom Morgan Stanley and its subsidiaries render investment banking and other services is such that it would be inadvisable to exclude
these companies from the Fund’s portfolio.
Morgan Stanley’s
Marketing Activities. Morgan Stanley is engaged in the business of underwriting, syndicating, brokering, administering,
servicing, arranging and advising on the distribution of a wide variety of securities and other investments in which a Fund may
invest. Subject to the restrictions of the 1940 Act, including Sections 10(f) and 17(e) thereof, a Fund may invest in transactions
in which Morgan Stanley acts as underwriter, placement agent, syndicator, broker, administrative agent, servicer, advisor, arranger
or structuring agent and receives fees or other compensation from the sponsors of such products or securities. Any fees earned
by Morgan Stanley in such capacity will not be shared with the investment adviser or the Funds. Certain conflicts of interest,
in addition to the receipt of fees or other compensation, would be inherent in these transactions. Moreover, the interests of one
of Morgan Stanley’s clients with respect to an issuer of securities in which a Fund has an investment may be adverse to the
investment adviser’s or a Fund’s best interests. In conducting the foregoing activities, Morgan Stanley will be acting
for its other clients and will have no obligation to act in the investment adviser’s or a Fund’s best interests.
Client Relationships.
Morgan Stanley has existing and potential relationships with a significant number of corporations, institutions and individuals.
In providing services to its clients, Morgan Stanley may face conflicts of interest with respect to activities recommended to or
performed for such clients, on the one hand, and a Fund, its shareholders or the entities in which the Fund invests, on the other
hand. In addition, these client relationships may present conflicts of interest in determining whether to offer certain investment
opportunities to a Fund.
In acting as principal or in providing advisory and other services to
its other clients, Morgan Stanley may engage in or recommend activities with respect to a particular matter that conflict with
or are different from activities engaged in or recommended by the investment adviser on a Fund’s behalf.
Principal Investments.
To the extent permitted by applicable law, there may be situations in which a Fund’s interests may conflict with the
interests of one or more general accounts of Morgan Stanley and its affiliates or accounts managed by Morgan Stanley or its affiliates.
This may occur because these accounts hold public and private debt and equity securities of many issuers which may be or become
portfolio companies, or from whom portfolio companies may be acquired.
Transactions with
Portfolio Companies of Affiliated Investment Accounts. The companies in which a Fund may invest may be counterparties to
or participants in agreements, transactions or other arrangements with portfolio companies or other entities of portfolio investments
of Affiliated Investment Accounts (for example, a company in which a Fund invests may retain a company in which an Affiliated Investment
Account invests to provide services or may acquire an asset from such company or vice versa). Certain of these agreements, transactions
and arrangements involve fees, servicing payments, rebates and/or other benefits to Morgan Stanley or its affiliates. For example,
portfolio entities may, including at the encouragement of Morgan Stanley, enter into agreements regarding group procurement and/or
vendor discounts. Morgan Stanley and its affiliates may also participate in these agreements and may realize better pricing or
discounts as a result of the participation of portfolio entities. To the extent permitted by applicable law, certain of these agreements
may provide for commissions or similar payments and/or discounts or rebates to be paid to a portfolio entity of an Affiliated Investment
Account, and such payments or discounts or rebates may also be made directly to Morgan Stanley or its affiliates. Under these arrangements,
a particular portfolio company or other entity may benefit to a greater degree than the other participants, and the funds, investment
vehicles and accounts (which may or may not include a Fund) that own an interest in such entity will receive a greater relative
benefit from the arrangements than the Eaton Vance funds, investment vehicles or accounts that do not own an interest therein.
Fees and compensation received by portfolio companies of Affiliated Investment Accounts in relation to the foregoing will not be shared with a Fund or offset advisory
fees payable.
Investments in Portfolio
Investments of Other Funds. To the extent permitted by applicable law, when a Fund invests in certain companies or other
entities, other funds affiliated with the investment adviser may have made or may be making an investment in such companies or
other entities. Other funds that have been or may be managed by the investment adviser may invest in the companies or other entities
in which a Fund has made an investment. Under such circumstances, a Fund and such other funds may have conflicts of interest (e.g.,
over the terms, exit strategies and related matters, including the exercise of remedies of their respective investments). If the
interests held by a Fund are different from (or take priority over) those held by such other funds, the investment adviser may
be required to make a selection at the time of conflicts between the interests held by such other funds and the interests held
by a Fund.
Allocation of Expenses.
Expenses may be incurred that are attributable to a Fund and one or more other Affiliated Investment Accounts (including in connection
with issuers in which a Fund and such other Affiliated Investment Accounts have overlapping investments). The allocation of such
expenses among such entities raises potential conflicts of interest. The investment adviser and its affiliates intend to allocate
such common expenses among a Fund and any such other Affiliated Investment Accounts on a pro rata basis or in such other manner
as the investment adviser deems to be fair and equitable or in such other manner as may be required by applicable law.
Temporary Investments.
To more efficiently invest short-term cash balances held by a Fund, the investment adviser may invest such balances on an
overnight “sweep” basis in shares of one or more money market funds or other short-term vehicles. It is anticipated
that the investment adviser to these money market funds or other short-term vehicles may be the investment adviser (or an affiliate)
to the extent permitted by applicable law, including Rule 12d1-1 under the 1940 Act. The Fund currently invests in Eaton Vance
Cash Reserves Fund, LLC (Cash Reserves Fund), an affiliated investment company managed by Eaton Vance, for this purpose. The Eaton
Vance does not currently receive a fee for advisory services provided to Cash Reserves Fund.
Transactions with
Affiliates. The investment adviser and any investment sub-adviser might purchase securities from underwriters or placement
agents in which a Morgan Stanley affiliate is a member of a syndicate or selling group, as a result of which an affiliate might
benefit from the purchase through receipt of a fee or otherwise. Neither the investment adviser nor any investment sub-adviser
will purchase securities on behalf of a Fund from an affiliate that is acting as a manager of a syndicate or selling group. Purchases
by the investment adviser on behalf of a Fund from an affiliate acting as a placement agent must meet the requirements of applicable
law. Furthermore, Morgan Stanley may face conflicts of interest when the Funds use service providers affiliated with Morgan Stanley
because Morgan Stanley receives greater overall fees when they are used.
General Process for
Potential Conflicts. All of the transactions described above involve the potential for conflicts of interest between the
investment adviser, related persons of the investment adviser and/or their clients. The Advisers Act, the 1940 Act and ERISA impose
certain requirements designed to decrease the possibility of conflicts of interest between an investment adviser and its clients.
In some cases, transactions may be permitted subject to fulfillment of certain conditions. Certain other transactions may be prohibited.
In addition, the investment adviser has instituted policies and procedures designed to prevent conflicts of interest from arising
and, when they do arise, to ensure that it effects transactions for clients in a manner that is consistent with its fiduciary duty
to its clients and in accordance with applicable law. The investment adviser seeks to ensure that potential or actual conflicts
of interest are appropriately resolved taking into consideration the overriding best interests of the client.
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