N-CSRS 1 d624638dncsrs.htm EATON VANCE MUTUAL FUNDS TRUST Eaton Vance Mutual Funds Trust

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

Form N-CSR

 

 

CERTIFIED SHAREHOLDER REPORT OF REGISTERED

MANAGEMENT INVESTMENT COMPANIES

Investment Company Act File Number: 811-04015

 

 

Eaton Vance Mutual Funds Trust

(Exact Name of Registrant as Specified in Charter)

 

 

Two International Place, Boston, Massachusetts 02110

(Address of Principal Executive Offices)

 

 

Maureen A. Gemma

Two International Place, Boston, Massachusetts 02110

(Name and Address of Agent for Services)

 

 

(617) 482-8260

(Registrant’s Telephone Number)

February 28

Date of Fiscal Year End

August 31, 2018

Date of Reporting Period

 

 

 

Item 1. Reports to Stockholders

LOGO

 

 

Parametric

Dividend Income Fund

Semiannual Report

August 31, 2018

 

 

 

 

LOGO

 

 

 

Commodity Futures Trading Commission Registration. Effective December 31, 2012, the Commodity Futures Trading Commission (“CFTC”) adopted certain regulatory changes that subject registered investment companies and advisers to regulation by the CFTC if a fund invests more than a prescribed level of its assets in certain CFTC-regulated instruments (including futures, certain options and swap agreements) or markets itself as providing investment exposure to such instruments. The Fund has claimed an exclusion from the definition of the term “commodity pool operator” under the Commodity Exchange Act. Accordingly, neither the Fund nor the adviser with respect to the operation of the Fund is subject to CFTC regulation. Because of its management of other strategies, the Fund’s adviser is registered with the CFTC as a commodity pool operator and a commodity trading advisor.

Fund shares are not insured by the FDIC and are not deposits or other obligations of, or guaranteed by, any depository institution. Shares are subject to investment risks, including possible loss of principal invested.

This report must be preceded or accompanied by a current summary prospectus or prospectus. Before investing, investors should consider carefully the investment objective, risks, and charges and expenses of a mutual fund. This and other important information is contained in the summary prospectus and prospectus, which can be obtained from a financial advisor. Prospective investors should read the prospectus carefully before investing. For further information, please call 1-800-260-0761.

Semiannual Report August 31, 2018

Parametric Dividend Income Fund

Table of Contents

 

Performance

      2  

Fund Profile

      2  

Endnotes and Additional Disclosures

      3  

Fund Expenses

      4  

Financial Statements

      5  

Special Meeting of Shareholders

      18  

Board of Trustees’ Contract Approval

      19  

Officers and Trustees

      22  

Important Notices

      23  

Parametric Dividend Income Fund

August 31, 2018

 

Performance1,2

 

Portfolio Managers Thomas Seto, Timothy W. Atwill, Ph.D., CFA and Alexander Paulsen, each of Parametric Portfolio Associates LLC

 

% Average Annual Total Returns   

Class

Inception Date

      Performance
Inception Date		      Six Months      One Year      Five Years     Since
Inception		  

Investor Class at NAV

      03/26/2014        03/26/2014        7.19 %       15.95 %       —       11.24 % 

Institutional Class at NAV

      03/26/2014        03/26/2014        7.31        16.20        —       11.51  

Russell 1000® Value Index

      —        —        4.86 %       12.47 %       11.21 %      9.33 % 

NASDAQ US Dividend Achievers™ Select Index

      —        —        7.40        19.92        12.61       11.45  
                
% Total Annual Operating Expense Ratios3                                   

Investor

Class

    

Institutional

Class

  

Gross

                  1.27 %      1.02 % 

Net

                  0.65       0.40  

Fund Profile

 

 

Sector Allocation (% of net assets)4

 

 

LOGO

 

Top 10 Holdings (% of net assets)4

 

 

Cisco Systems, Inc.

      0.6 % 

QUALCOMM, Inc.

      0.6  

MDC Holdings, Inc.

      0.6  

Mercury General Corp.

      0.6  

Automatic Data Processing, Inc.

      0.6  

Darden Restaurants, Inc.

      0.6  

Garmin, Ltd.

      0.6  

Emerson Electric Co.

      0.6  

Eli Lilly & Co.

      0.6  

Clorox Co. (The)

      0.6  

Total

      6.0 % 
 

 

See Endnotes and Additional Disclosures in this report.

Past performance is no guarantee of future results. Returns are historical and are calculated by determining the percentage change in net asset value (NAV) or offering price (as applicable) with all distributions reinvested. Investment return and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Performance less than or equal to one year is cumulative. Performance is for the stated time period only; due to market volatility, the Fund’s current performance may be lower or higher than quoted. Returns are before taxes unless otherwise noted. For performance as of the most recent month-end, please refer to eatonvance.com.

 

  2  

Parametric Dividend Income Fund

August 31, 2018

 

Endnotes and Additional Disclosures

 

 

1 

Russell 1000® Value Index is an unmanaged index of U.S. large-cap value stocks. NASDAQ US Dividend Achievers™ Select Index is an unmanaged index of stocks with at least ten consecutive years of increasing regular dividends. Source: Nasdaq, Inc. The information is provided by Nasdaq (with its affiliates, are referred to as the “Corporations”) and Nasdaq’s third party licensors on an “as is” basis and the Corporations make no guarantees and bear no liability of any kind with respect to the information or the Fund. Unless otherwise stated, index returns do not reflect the effect of any applicable sales charges, commissions, expenses, taxes or leverage, as applicable. It is not possible to invest directly in an index.

 

2 

Returns are historical and are calculated by determining the percentage change in NAV with all distributions reinvested. Unless otherwise stated, performance does not reflect the deduction of taxes on Fund distributions or redemptions of Fund shares. Performance since inception for an index, if presented, is the performance since the Fund’s or oldest share class’ inception, as applicable.

 

3 

Source: Fund prospectus. Net expense ratios reflect a contractual expense reimbursement that continues through 6/30/19. Without the reimbursement, performance would have been lower. The expense ratios for the current reporting period can be found in the Financial Highlights section of this report.

 

4 

Excludes cash and cash equivalents.

 

  

Fund profile subject to change due to active management.

Important Notice to Shareholders

Effective July 1, 2018, the Fund changed its primary benchmark to the Russell 1000® Value Index because the sub-adviser believes it is more closely aligned with the Fund’s investment strategies.

    

 

 

  3  

Parametric Dividend Income Fund

August 31, 2018

 

Fund Expenses

 

 

Example:  As a Fund shareholder, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchases and redemption fees (if applicable); and (2) ongoing costs, including management fees; distribution and/or service fees; and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of Fund investing and to compare these costs with the ongoing costs of investing in other mutual funds. The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (March 1, 2018 – August 31, 2018).

Actual Expenses:  The first section of the table below provides information about actual account values and actual expenses. You may use the information in this section, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first section under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes:  The second section of the table below provides information about hypothetical account values and hypothetical expenses based on the actual Fund expense ratio and an assumed rate of return of 5% per year (before expenses), which is not the actual Fund return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in your Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads) or redemption fees (if applicable). Therefore, the second section of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would be higher.

 

     Beginning
Account Value
(3/1/18)		      Ending
Account Value
(8/31/18)		      Expenses Paid
During Period*
(3/1/18 – 8/31/18)		      Annualized
Expense
Ratio		  

Actual

           

Investor Class

   $ 1,000.00      $ 1,071.90      $ 3.39 **       0.65 % 

Institutional Class

   $ 1,000.00      $ 1,073.10      $ 2.09 **       0.40 % 
         

Hypothetical

           

(5% return per year before expenses)

           

Investor Class

   $ 1,000.00      $ 1,021.90      $ 3.31 **       0.65 % 

Institutional Class

   $ 1,000.00      $ 1,023.20      $ 2.04 **       0.40 % 

 

*

Expenses are equal to the Fund’s annualized expense ratio for the indicated Class, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period). The Example assumes that the $1,000 was invested at the net asset value per share determined at the close of business on February 28, 2018.

 

**

Absent an allocation of certain expenses to affiliates, expenses would be higher.

 

  4  

Parametric Dividend Income Fund

August 31, 2018

 

Portfolio of Investments (Unaudited)

 

 

Common Stocks — 99.4%

 

Security   Shares     Value  
Aerospace & Defense — 1.1%  

Lockheed Martin Corp.

     1,093     $ 350,207  

United Technologies Corp.

     2,630       346,371  
      $ 696,578  
Air Freight & Logistics — 0.6%  

United Parcel Service, Inc., Class B

     3,082     $ 378,716  
      $ 378,716  
Automobiles — 0.5%  

Ford Motor Co.

     34,757     $ 329,496  
      $ 329,496  
Banks — 2.8%  

Bank of Hawaii Corp.

     4,572     $ 380,070  

F.N.B. Corp.

     28,391       381,859  

PacWest Bancorp

     6,999       353,380  

People’s United Financial, Inc.

     19,073       353,041  

United Bankshares, Inc.

     9,911       390,493  
      $ 1,858,843  
Beverages — 1.0%  

Coca-Cola Co. (The)

     7,570     $ 337,395  

PepsiCo, Inc.

     3,064       343,199  
      $ 680,594  
Biotechnology — 1.7%  

AbbVie, Inc.

     4,060     $ 389,679  

Amgen, Inc.

     1,920       383,635  

Gilead Sciences, Inc.

     4,587       347,374  
      $ 1,120,688  
Building Products — 0.6%  

Johnson Controls International PLC

     10,094     $ 381,250  
      $ 381,250  
Capital Markets — 3.1%  

Artisan Partners Asset Management, Inc., Class A

     10,324     $ 342,241  

BGC Partners, Inc., Class A

     29,126       361,745  

Federated Investors, Inc., Class B

     14,459       334,870  

Franklin Resources, Inc.

     10,201       323,780  

Invesco, Ltd.

     14,994       361,355  

Moelis & Co., Class A

     5,674       329,376  
      $ 2,053,367  
Security   Shares     Value  
Chemicals — 5.5%  

Air Products and Chemicals, Inc.

     2,269     $ 377,312  

CF Industries Holdings, Inc.

     7,059       366,715  

DowDuPont, Inc.

     5,378       377,159  

Eastman Chemical Co.

     3,454       335,142  

International Flavors & Fragrances, Inc.

     2,853       371,717  

Kronos Worldwide, Inc.

     17,316       348,571  

LyondellBasell Industries NV, Class A

     3,381       381,309  

Praxair, Inc.

     2,117       334,888  

RPM International, Inc.

     5,767       389,273  

Scotts Miracle-Gro Co. (The), Class A

     4,517       337,510  
      $ 3,619,596  
Commercial Services & Supplies — 1.7%  

KAR Auction Services, Inc.

     6,351     $ 398,144  

Republic Services, Inc.

     4,891       358,804  

Waste Management, Inc.

     3,939       358,055  
      $ 1,115,003  
Communications Equipment — 1.2%  

Cisco Systems, Inc.

     8,811     $ 420,901  

Juniper Networks, Inc.

     13,990       397,736  
      $ 818,637  
Containers & Packaging — 3.2%  

Avery Dennison Corp.

     3,108     $ 326,899  

Bemis Co., Inc.

     8,079       398,133  

Greif, Inc., Class A

     6,594       363,857  

International Paper Co.

     6,634       339,263  

Sonoco Products Co.

     6,315       353,893  

WestRock Co.

     6,110       336,539  
      $ 2,118,584  
Distributors — 0.6%  

Genuine Parts Co.

     3,627     $ 362,156  
      $ 362,156  
Diversified Telecommunication Services — 1.1%  

AT&T, Inc.

     10,939     $ 349,392  

Verizon Communications, Inc.

     6,972       379,067  
      $ 728,459  
Electric Utilities — 6.6%  

American Electric Power Co., Inc.

     4,970     $ 356,498  

Avangrid, Inc.

     7,083       349,475  
 

 

  5   See Notes to Financial Statements.

Parametric Dividend Income Fund

August 31, 2018

 

Portfolio of Investments (Unaudited) — continued

 

 

Security   Shares     Value  
Electric Utilities (continued)  

Duke Energy Corp.

     4,333     $ 352,013  

Entergy Corp.

     4,629       386,938  

Eversource Energy

     6,155       384,257  

FirstEnergy Corp.

     10,644       397,873  

Hawaiian Electric Industries, Inc.

     10,173       358,802  

OGE Energy Corp.

     9,736       358,577  

Pinnacle West Capital Corp.

     4,361       342,556  

PPL Corp.

     12,203       362,917  

Southern Co. (The)

     7,915       346,519  

Xcel Energy, Inc.

     7,561       363,306  
      $ 4,359,731  
Electrical Equipment — 1.7%  

Eaton Corp. PLC

     4,582     $ 380,948  

Emerson Electric Co.

     5,266       404,060  

Rockwell Automation, Inc.

     1,915       346,538  
      $ 1,131,546  
Electronic Equipment, Instruments & Components — 0.5%  

Corning, Inc.

     10,625     $ 356,044  
      $ 356,044  
Energy Equipment & Services — 2.6%  

Baker Hughes

     10,091     $ 332,700  

Halliburton Co.

     8,276       330,130  

Helmerich & Payne, Inc.

     5,858       384,109  

RPC, Inc.

     26,099       357,034  

Schlumberger, Ltd.

     5,181       327,232  
      $ 1,731,205  
Food & Staples Retailing — 1.1%  

Walgreens Boots Alliance, Inc.

     5,061     $ 346,982  

Walmart, Inc.

     4,133       396,190  
      $ 743,172  
Food Products — 4.4%  

Archer-Daniels-Midland Co.

     7,839     $ 395,086  

Bunge, Ltd.

     5,134       333,607  

Conagra Brands, Inc.

     9,586       352,285  

General Mills, Inc.

     7,623       350,734  

Ingredion, Inc.

     3,513       355,059  

Kellogg Co.

     4,907       352,274  

Kraft Heinz Co. (The)

     5,805       338,257  

Lancaster Colony Corp.

     2,513       392,707  
      $ 2,870,009  
Security   Shares     Value  
Health Care Equipment & Supplies — 2.9%  

Abbott Laboratories

     5,372     $ 359,064  

Baxter International, Inc.

     4,906       364,859  

Becton, Dickinson and Co.

     1,479       387,306  

Medtronic PLC

     4,136       398,752  

Stryker Corp.

     2,256       382,234  
      $ 1,892,215  
Health Care Providers & Services — 2.8%  

Cardinal Health, Inc.

     7,296     $ 380,778  

Owens & Minor, Inc.

     20,526       348,532  

Patterson Cos., Inc.

     15,520       349,976  

Quest Diagnostics, Inc.

     3,418       375,912  

UnitedHealth Group, Inc.

     1,466       393,562  
      $ 1,848,760  
Hotels, Restaurants & Leisure — 3.3%  

Carnival Corp.

     6,278     $ 386,034  

Cracker Barrel Old Country Store, Inc.

     2,402       358,114  

Darden Restaurants, Inc.

     3,494       405,444  

Extended Stay America, Inc.

     16,534       333,656  

Las Vegas Sands Corp.

     4,983       325,988  

Six Flags Entertainment Corp.

     5,767       389,561  
      $ 2,198,797  
Household Durables — 2.4%  

Garmin, Ltd.

     5,944     $ 405,024  

Leggett & Platt, Inc.

     8,517       387,013  

MDC Holdings, Inc.

     12,952       410,578  

Tupperware Brands Corp.

     11,110       361,297  
      $ 1,563,912  
Household Products — 2.3%  

Clorox Co. (The)

     2,758     $ 399,855  

Colgate-Palmolive Co.

     5,267       349,782  

Kimberly-Clark Corp.

     3,443       397,804  

Procter & Gamble Co. (The)

     4,561       378,335  
      $ 1,525,776  
Industrial Conglomerates — 1.1%  

3M Co.

     1,706     $ 359,829  

Honeywell International, Inc.

     2,229       354,545  
      $ 714,374  
 

 

  6   See Notes to Financial Statements.

Parametric Dividend Income Fund

August 31, 2018

 

Portfolio of Investments (Unaudited) — continued

 

 

Security   Shares     Value  
Insurance — 4.4%  

Aflac, Inc.

     7,554     $ 349,297  

Cincinnati Financial Corp.

     4,642       355,902  

Fidelity National Financial, Inc.

     8,732       350,153  

Mercury General Corp.

     7,554       407,161  

MetLife, Inc.

     7,648       350,967  

Old Republic International Corp.

     17,440       386,819  

Principal Financial Group, Inc.

     6,006       331,471  

Travelers Cos., Inc. (The)

     2,669       351,240  
      $ 2,883,010  
IT Services — 5.0%  

Accenture PLC, Class A

     2,294     $ 387,847  

Amdocs, Ltd.

     5,184       338,411  

Automatic Data Processing, Inc.

     2,767       406,057  

Cognizant Technology Solutions Corp., Class A

     4,333       339,837  

Convergys Corp.

     14,233       351,982  

International Business Machines Corp.

     2,405       352,284  

Jack Henry & Associates, Inc.

     2,300       364,412  

Paychex, Inc.

     5,371       393,426  

Western Union Co. (The)

     17,404       329,284  
      $ 3,263,540  
Life Sciences Tools & Services — 1.1%  

Agilent Technologies, Inc.

     5,416     $ 365,797  

Bio-Techne Corp.

     1,902       365,507  
      $ 731,304  
Machinery — 2.3%  

Cummins, Inc.

     2,708     $ 383,994  

Dover Corp.

     4,516       387,789  

Ingersoll-Rand PLC

     3,765       381,357  

Snap-on, Inc.

     2,199       388,739  
      $ 1,541,879  
Media — 1.6%  

Gannett Co., Inc.

     33,241     $ 341,717  

Interpublic Group of Cos., Inc. (The)

     16,465       384,458  

Omnicom Group, Inc.

     5,122       355,057  
      $ 1,081,232  
Metals & Mining — 1.5%  

Compass Minerals International, Inc.

     5,165     $ 323,071  

Kaiser Aluminum Corp.

     3,171       347,510  

Nucor Corp.

     5,209       325,562  
      $ 996,143  
Security   Shares     Value  
Multi-Utilities — 4.4%  

Ameren Corp.

     5,990     $ 378,748  

Centerpoint Energy, Inc.

     12,487       347,014  

Consolidated Edison, Inc.

     4,477       353,370  

Dominion Energy, Inc.

     4,917       347,976  

DTE Energy Co.

     3,247       360,871  

NorthWestern Corp.

     6,296       377,508  

Public Service Enterprise Group, Inc.

     7,211       377,496  

WEC Energy Group, Inc.

     5,700       385,206  
      $ 2,928,189  
Multiline Retail — 0.6%  

Target Corp.

     4,541     $ 397,338  
      $ 397,338  
Oil, Gas & Consumable Fuels — 7.9%  

Chevron Corp.

     2,738     $ 324,343  

ConocoPhillips

     4,843       355,621  

CVR Energy, Inc.

     8,967       341,194  

EOG Resources, Inc.

     2,942       347,833  

Exxon Mobil Corp.

     4,281       343,208  

HollyFrontier Corp.

     4,672       348,157  

Kinder Morgan, Inc.

     19,718       349,009  

Marathon Petroleum Corp.

     4,295       353,436  

Occidental Petroleum Corp.

     4,202       335,614  

ONEOK, Inc.

     4,958       326,782  

Phillips 66

     2,867       339,768  

SemGroup Corp., Class A

     13,972       338,122  

Targa Resources Corp.

     7,065       389,070  

Valero Energy Corp.

     2,986       351,990  

Williams Cos., Inc. (The)

     12,563       371,739  
      $ 5,215,886  
Paper & Forest Products — 0.6%  

Domtar Corp.

     7,723     $ 393,101  
      $ 393,101  
Pharmaceuticals — 2.9%  

Bristol-Myers Squibb Co.

     5,940     $ 359,667  

Eli Lilly & Co.

     3,789       400,308  

Johnson & Johnson

     2,649       356,794  

Merck & Co., Inc.

     5,674       389,180  

Pfizer, Inc.

     9,616       399,256  
      $ 1,905,205  
 

 

  7   See Notes to Financial Statements.

Parametric Dividend Income Fund

August 31, 2018

 

Portfolio of Investments (Unaudited) — continued

 

 

Security   Shares     Value  
Professional Services — 0.6%  

Nielsen Holdings PLC

     13,933     $ 362,258  
      $ 362,258  
Semiconductors & Semiconductor Equipment — 2.3%  

Intel Corp.

     7,341     $ 355,525  

Maxim Integrated Products, Inc.

     5,739       347,037  

QUALCOMM, Inc.

     5,986       411,298  

Texas Instruments, Inc.

     3,299       370,808  
      $ 1,484,668  
Software — 1.1%  

CA, Inc.

     7,947     $ 348,079  

Microsoft Corp.

     3,527       396,188  
      $ 744,267  
Specialty Retail — 2.3%  

Buckle, Inc. (The)

     15,410     $ 396,807  

Chico’s FAS, Inc.

     41,684       380,158  

DSW, Inc., Class A

     11,270       374,840  

L Brands, Inc.

     13,190       348,612  
      $ 1,500,417  
Thrifts & Mortgage Finance — 0.5%  

New York Community Bancorp, Inc.

     32,318     $ 348,065  
      $ 348,065  
Tobacco — 2.2%  

Altria Group, Inc.

     6,296     $ 368,442  

Philip Morris International, Inc.

     4,453       346,844  

Universal Corp.

     6,136       366,933  

Vector Group, Ltd.

     23,200       360,296  
      $ 1,442,515  
Trading Companies & Distributors — 1.7%  

Fastenal Co.

     6,628     $ 386,810  

MSC Industrial Direct Co., Inc., Class A

     4,442       379,702  

Watsco, Inc.

     2,202       385,328  
      $ 1,151,840  

Total Common Stocks
(identified cost $61,041,177)

 

   $ 65,568,365  
Short-Term Investments — 0.3%

 

Description   Units     Value  

Eaton Vance Cash Reserves Fund, LLC, 2.14%(1)

     207,136     $ 207,157  

Total Short-Term Investments
(identified cost $207,156)

 

   $ 207,157  

Total Investments — 99.7%
(identified cost $61,248,333)

 

   $ 65,775,522  

Other Assets, Less Liabilities — 0.3%

 

   $ 211,690  

Net Assets — 100.0%

 

   $ 65,987,212  

The percentage shown for each investment category in the Portfolio of Investments is based on net assets.

 

(1) 

Affiliated investment company, available to Eaton Vance portfolios and funds, which invests in high quality, U.S. dollar denominated money market instruments. The rate shown is the annualized seven-day yield as of August 31, 2018.

 

 

  8   See Notes to Financial Statements.

Parametric Dividend Income Fund

August 31, 2018

 

Statement of Assets and Liabilities (Unaudited)

 

 

Assets    August 31, 2018  

Unaffiliated investments, at value (identified cost, $61,041,177)

    $ 65,568,365  

Affiliated investment, at value (identified cost, $207,156)

      207,157  

Dividends receivable

      192,026  

Dividends receivable from affiliated investment

      1,324  

Receivable for investments sold

      439,076  

Receivable for Fund shares sold

      96,336  

Receivable from affiliates

      13,225  

Total assets

    $ 66,517,509  
Liabilities         

Payable for investments purchased

    $ 466,809  

Payable for Fund shares redeemed

      2,544  

Payable to affiliates:

   

Investment adviser and administration fee

      14,927  

Distribution and service fees

      1,429  

Accrued expenses

      44,588  

Total liabilities

    $ 530,297  

Net Assets

    $ 65,987,212  
Sources of Net Assets         

Paid-in capital

    $ 60,964,766  

Accumulated undistributed net investment income

      275,697  

Accumulated net realized gain

      219,560  

Net unrealized appreciation

      4,527,189  

Total

    $ 65,987,212  
Investor Class Shares

 

Net Assets

    $ 7,270,433  

Shares Outstanding

      532,726  

Net Asset Value, Offering Price and Redemption Price Per Share

   

(net assets ÷ shares of beneficial interest outstanding)

    $ 13.65  
Institutional Class Shares

 

Net Assets

    $ 58,716,779  

Shares Outstanding

      4,293,806  

Net Asset Value, Offering Price and Redemption Price Per Share

   

(net assets ÷ shares of beneficial interest outstanding)

    $ 13.67  

 

  9   See Notes to Financial Statements.

Parametric Dividend Income Fund

August 31, 2018

 

Statement of Operations (Unaudited)

 

 

Investment Income   

Six Months Ended

August 31, 2018

  

Dividends

    $ 766,129  

Dividends from affiliated investment

      4,285  

Total investment income

    $ 770,414  
Expenses         

Investment adviser and administration fee

    $ 67,709  

Distribution and service fees

   

Investor Class

      7,385  

Trustees’ fees and expenses

      1,170  

Custodian fee

      19,541  

Transfer and dividend disbursing agent fees

      9,191  

Legal and accounting services

      18,521  

Printing and postage

      5,858  

Registration fees

      26,040  

Miscellaneous

      5,295  

Total expenses

    $ 160,710  

Deduct —

   

Allocation of expenses to affiliates

    $ 62,807  

Total expense reductions

    $ 62,807  

Net expenses

    $ 97,903  

Net investment income

    $ 672,511  
Realized and Unrealized Gain (Loss)         

Net realized gain (loss) —

   

Investment transactions

    $ 508,494  

Investment transactions — affiliated investment

      29  

Net realized gain

    $ 508,523  

Change in unrealized appreciation (depreciation) —

   

Investments

    $ 1,851,896  

Investments — affiliated investment

      1  

Net change in unrealized appreciation (depreciation)

    $ 1,851,897  

Net realized and unrealized gain

    $ 2,360,420  

Net increase in net assets from operations

    $ 3,032,931  

 

  10   See Notes to Financial Statements.

Parametric Dividend Income Fund

August 31, 2018

 

Statements of Changes in Net Assets

 

 

Increase (Decrease) in Net Assets   

Six Months Ended

August 31, 2018
(Unaudited)

     

Year Ended

February 28, 2018

  

From operations —

      

Net investment income

    $ 672,511      $ 633,383  

Net realized gain

      508,523        209,541  

Net change in unrealized appreciation (depreciation)

      1,851,897        1,470,757  

Net increase in net assets from operations

    $ 3,032,931      $ 2,313,681  

Distributions to shareholders —

      

From net investment income

      

Investor Class

    $ (57,415 )     $ (95,811 ) 

Institutional Class

      (436,821 )       (488,083 ) 

From net realized gain

      

Investor Class

      (24,183 )       (51,121 ) 

Institutional Class

      (151,202 )       (226,603 ) 

Total distributions to shareholders

    $ (669,621 )     $ (861,618 ) 

Transactions in shares of beneficial interest —

      

Proceeds from sale of shares

      

Investor Class

    $ 1,833,226      $ 4,143,124  

Institutional Class

      42,528,623        6,677,930  

Net asset value of shares issued to shareholders in payment of distributions declared

      

Investor Class

      81,598        146,932  

Institutional Class

      453,217        713,880  

Cost of shares redeemed

      

Investor Class

      (610,974 )       (1,325,963 ) 

Institutional Class

      (7,404,430 )       (2,584,695 ) 

Net increase in net assets from Fund share transactions

    $ 36,881,260      $ 7,771,208  

Net increase in net assets

    $ 39,244,570      $ 9,223,271  
Net Assets

 

At beginning of period

    $ 26,742,642      $ 17,519,371  

At end of period

    $ 65,987,212      $ 26,742,642  
Accumulated undistributed net investment income
included in net assets

 

At end of period

    $ 275,697      $ 97,422  

 

  11   See Notes to Financial Statements.

 

 

Parametric Dividend Income Fund

August 31, 2018

 

Financial Highlights

 

 

     Investor Class  
     Six Months Ended
August 31, 2018
(Unaudited)		     Year Ended February 28,      Year Ended
February 29, 2016		    

Period Ended

February 28,  2015(1)

  
    2018      2017  

Net asset value — Beginning of period

    $ 12.910     $ 12.170      $ 10.080      $ 10.930     $ 10.000  
Income (Loss) From Operations                                           

Net investment income(2)

    $ 0.182     $ 0.328      $ 0.275      $ 0.284     $ 0.230  

Net realized and unrealized gain (loss)

      0.739       0.854        2.114        (0.666 )      1.143  

Total income (loss) from operations

    $ 0.921     $ 1.182      $ 2.389      $ (0.382 )    $ 1.373  
Less Distributions                                           

From net investment income

    $ (0.132 )    $ (0.305 )     $ (0.249 )     $ (0.301 )    $ (0.197 ) 

From net realized gain

      (0.049 )      (0.137 )       (0.050 )       (0.167 )      (0.246 ) 

Total distributions

    $ (0.181 )    $ (0.442 )     $ (0.299 )     $ (0.468 )    $ (0.443 ) 

Net asset value — End of period

    $ 13.650     $ 12.910      $ 12.170      $ 10.080     $ 10.930  

Total Return(3)(4)

      7.19 %(5)      9.87 %       23.97 %       (3.51 )%      13.88 %(5) 
Ratios/Supplemental Data                                           

Net assets, end of period (000’s omitted)

    $ 7,270     $ 5,633      $ 2,450      $ 97     $ 22  

Ratios (as a percentage of average daily net assets):

             

Expenses(4)

      0.65 %(6)      0.65 %       0.68 %       0.85 %      0.88 %(6) 

Net investment income

      2.74 %(6)      2.61 %       2.34 %       2.77 %      2.33 %(6) 

Portfolio Turnover

      45 %(5)      30 %       26 %       31 %      39 %(5) 

 

(1) 

For the period from the start of business, March 26, 2014, to February 28, 2015.

 

(2) 

Computed using average shares outstanding.

 

(3) 

Returns are historical and are calculated by determining the percentage change in net asset value with all distributions reinvested.

 

(4) 

The investment adviser and administrator and/or the sub-adviser reimbursed certain operating expenses (equal to 0.28%, 0.62%, 1.60%, 3.22% and 4.84% of average daily net assets for the six months ended August 31, 2018, the years ended February 28, 2018, 2017 and February 29, 2016 and the period ended February 28, 2015, respectively). Absent this reimbursement, total return would be lower.

 

(5) 

Not annualized.

 

(6) 

Annualized.

 

  12   See Notes to Financial Statements.

 

 

Parametric Dividend Income Fund

August 31, 2018

 

Financial Highlights — continued

 

 

     Institutional Class  
     Six Months Ended
August 31, 2018
(Unaudited)		     Year Ended February 28,      Year Ended
February 29, 2016		    

Period Ended

February 28,  2015(1)

  
    2018      2017  

Net asset value — Beginning of period

    $ 12.930     $ 12.190      $ 10.090      $ 10.930     $ 10.000  
Income (Loss) From Operations                                           

Net investment income(2)

    $ 0.199     $ 0.358      $ 0.310      $ 0.334     $ 0.249  

Net realized and unrealized gain (loss)

      0.739       0.851        2.108        (0.683 )      1.143  

Total income (loss) from operations

    $ 0.938     $ 1.209      $ 2.418      $ (0.349 )    $ 1.392  
Less Distributions                                           

From net investment income

    $ (0.149 )    $ (0.332 )     $ (0.268 )     $ (0.324 )    $ (0.216 ) 

From net realized gain

      (0.049 )      (0.137 )       (0.050 )       (0.167 )      (0.246 ) 

Total distributions

    $ (0.198 )    $ (0.469 )     $ (0.318 )     $ (0.491 )    $ (0.462 ) 

Net asset value — End of period

    $ 13.670     $ 12.930      $ 12.190      $ 10.090     $ 10.930  

Total Return(3)(4)

      7.31 %(5)      10.09 %       24.26 %       (3.21 )%      14.09 %(5) 
Ratios/Supplemental Data                                           

Net assets, end of period (000’s omitted)

    $ 58,717     $ 21,110      $ 15,070      $ 3,689     $ 3,426  

Ratios (as a percentage of average daily net assets):

             

Expenses(4)

      0.40 %(6)      0.40 %       0.51 %       0.60 %      0.63 %(6) 

Net investment income

      2.99 %(6)      2.84 %       2.71 %       3.21 %      2.54 %(6) 

Portfolio Turnover

      45 %(5)      30 %       26 %       31 %      39 %(5) 

 

(1) 

For the period from the start of business, March 26, 2014, to February 28, 2015.

 

(2) 

Computed using average shares outstanding.

 

(3) 

Returns are historical and are calculated by determining the percentage change in net asset value with all distributions reinvested.

 

(4) 

The investment adviser and administrator and/or the sub-adviser reimbursed certain operating expenses (equal to 0.28%, 0.62%, 1.89%, 3.22% and 4.84% of average daily net assets for the six months ended August 31, 2018, the years ended February 28, 2018, 2017 and February 29, 2016 and the period ended February 28, 2015, respectively). Absent this reimbursement, total return would be lower.

 

(5) 

Not annualized.

 

(6) 

Annualized.

 

  13   See Notes to Financial Statements.

Parametric Dividend Income Fund

August 31, 2018

 

Notes to Financial Statements (Unaudited)

 

 

1  Significant Accounting Policies

Parametric Dividend Income Fund (the Fund) is a diversified series of Eaton Vance Mutual Funds Trust (the Trust). The Trust is a Massachusetts business trust registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company. The Fund’s investment objective is total return and current income. The Fund offers Investor Class and Institutional Class shares, which are offered at net asset value and are not subject to a sales charge. Each class represents a pro-rata interest in the Fund, but votes separately on class-specific matters and (as noted below) is subject to different expenses. Realized and unrealized gains and losses and net investment income and losses, other than class-specific expenses, are allocated daily to each class of shares based on the relative net assets of each class to the total net assets of the Fund. Each class of shares differs in its distribution plan and certain other class-specific expenses.

The following is a summary of significant accounting policies of the Fund. The policies are in conformity with accounting principles generally accepted in the United States of America (U.S. GAAP). The Fund is an investment company and follows accounting and reporting guidance in the Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 946.

A  Investment Valuation — The following methodologies are used to determine the market value or fair value of investments.

Equity Securities.  Equity securities listed on a U.S. securities exchange generally are valued at the last sale or closing price on the day of valuation or, if no sales took place on such date, at the mean between the closing bid and asked prices therefore on the exchange where such securities are principally traded. Equity securities listed on the NASDAQ Global or Global Select Market generally are valued at the NASDAQ official closing price. Unlisted or listed securities for which closing sales prices or closing quotations are not available are valued at the mean between the latest available bid and asked prices.

Affiliated Fund.  The Fund may invest in Eaton Vance Cash Reserves Fund, LLC (Cash Reserves Fund), an affiliated investment company managed by Eaton Vance Management (EVM). While Cash Reserves Fund is not a registered money market mutual fund, it conducts all of its investment activities in accordance with the requirements of Rule 2a-7 under the 1940 Act. Investments in Cash Reserves Fund are valued at the closing net asset value per unit on the valuation day. Cash Reserves Fund generally values its investment securities based on available market quotations provided by a third party pricing service.

Fair Valuation.  Investments for which valuations or market quotations are not readily available or are deemed unreliable are valued at fair value using methods determined in good faith by or at the direction of the Trustees of the Fund in a manner that fairly reflects the security’s value, or the amount that the Fund might reasonably expect to receive for the security upon its current sale in the ordinary course. Each such determination is based on a consideration of relevant factors, which are likely to vary from one pricing context to another. These factors may include, but are not limited to, the type of security, the existence of any contractual restrictions on the security’s disposition, the price and extent of public trading in similar securities of the issuer or of comparable companies or entities, quotations or relevant information obtained from broker/dealers or other market participants, information obtained from the issuer, analysts, and/or the appropriate stock exchange (for exchange-traded securities), an analysis of the company’s or entity’s financial condition, and an evaluation of the forces that influence the issuer and the market(s) in which the security is purchased and sold.

B  Investment Transactions — Investment transactions for financial statement purposes are accounted for on a trade date basis. Realized gains and losses on investments sold are determined on the basis of identified cost.

C  Income — Dividend income is recorded on the ex-dividend date for dividends received in cash and/or securities.

D  Federal Taxes — The Fund’s policy is to comply with the provisions of the Internal Revenue Code applicable to regulated investment companies and to distribute to shareholders each year substantially all of its net investment income, and all or substantially all of its net realized capital gains. Accordingly, no provision for federal income or excise tax is necessary.

As of August 31, 2018, the Fund had no uncertain tax positions that would require financial statement recognition, de-recognition, or disclosure. The Fund files a U.S. federal income tax return annually after its fiscal year-end, which is subject to examination by the Internal Revenue Service for a period of three years from the date of filing.

E  Expenses — The majority of expenses of the Trust are directly identifiable to an individual fund. Expenses which are not readily identifiable to a specific fund are allocated taking into consideration, among other things, the nature and type of expense and the relative size of the funds.

F  Use of Estimates — The preparation of the financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of income and expense during the reporting period. Actual results could differ from those estimates.

G  Indemnifications — Under the Trust’s organizational documents, its officers and Trustees may be indemnified against certain liabilities and expenses arising out of the performance of their duties to the Fund. Under Massachusetts law, if certain conditions prevail, shareholders of a Massachusetts business trust (such as the Trust) could be deemed to have personal liability for the obligations of the Trust. However, the Trust’s Declaration of Trust contains an express disclaimer of liability on the part of Fund shareholders and the By-laws provide that the Trust shall assume the defense on behalf of any Fund shareholders. Moreover, the By-laws also provide for indemnification out of Fund property of any shareholder held personally liable solely by reason of being or having been a shareholder for all loss or expense arising from such liability. Additionally, in the normal course of business, the Fund enters into

 

  14  

Parametric Dividend Income Fund

August 31, 2018

 

Notes to Financial Statements (Unaudited) — continued

 

 

agreements with service providers that may contain indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred.

H  Interim Financial Statements — The interim financial statements relating to August 31, 2018 and for the six months then ended have not been audited by an independent registered public accounting firm, but in the opinion of the Fund’s management, reflect all adjustments, consisting only of normal recurring adjustments, necessary for the fair presentation of the financial statements.

2  Distributions to Shareholders and Income Tax Information

It is the present policy of the Fund to make quarterly distributions of all or substantially all of its net investment income and to distribute annually all or substantially all of its net realized capital gains. Distributions to shareholders are recorded on the ex-dividend date. Distributions are declared separately for each class of shares. Shareholders may reinvest income and capital gain distributions in additional shares of the same class of the Fund at the net asset value as of the ex-dividend date or, at the election of the shareholder, receive distributions in cash. Distributions to shareholders are determined in accordance with income tax regulations, which may differ from U.S. GAAP. As required by U.S. GAAP, only distributions in excess of tax basis earnings and profits are reported in the financial statements as a return of capital. Permanent differences between book and tax accounting relating to distributions are reclassified to paid-in capital. For tax purposes, distributions from short-term capital gains are considered to be from ordinary income.

The cost and unrealized appreciation (depreciation) of investments of the Fund at August 31, 2018, as determined on a federal income tax basis, were as follows:

 

Aggregate cost

    $ 61,533,887  

Gross unrealized appreciation

    $ 5,023,525  

Gross unrealized depreciation

      (781,890 ) 

Net unrealized appreciation

    $ 4,241,635  

3  Investment Adviser and Administration Fee and Other Transactions with Affiliates

The investment adviser and administration fee is earned by EVM as compensation for investment advisory and administrative services rendered to the Fund. Pursuant to the investment advisory and administration agreement and subsequent fee reduction agreement between the Fund and EVM, the fee is computed at an annual rate of 0.30% of the Fund’s average daily net assets up to $1 billion and is payable monthly. On net assets of $1 billion and over, the annual fee is reduced. The fee reduction cannot be terminated or reduced without the approval of a majority vote of the Trustees of the Fund who are not interested persons of EVM or the Fund and by the vote of a majority of shareholders. For the six months ended August 31, 2018, the investment adviser and administration fee amounted to $67,709 or 0.30% (annualized) of the Fund’s average daily net assets. Pursuant to a sub-advisory agreement, EVM has delegated the investment management of the Fund to Parametric Portfolio Associates LLC (Parametric), a majority-owned subsidiary of Eaton Vance Corp. EVM pays Parametric a portion of its investment adviser and administration fee for sub-advisory services provided to the Fund. The Fund invests its cash in Cash Reserves Fund. EVM does not currently receive a fee for advisory services provided to Cash Reserves Fund.

EVM and Parametric have agreed to reimburse the Fund’s expenses to the extent that total annual operating expenses (relating to ordinary operating expenses only) exceed 0.65% and 0.40% of the Fund’s average daily net assets for Investor Class and Institutional Class, respectively. This agreement may be changed or terminated after June 30, 2019. Pursuant to this agreement, EVM and Parametric were allocated $62,807 in total of the Fund’s operating expenses for the six months ended August 31, 2018.

EVM provides sub-transfer agency and related services to the Fund pursuant to a Sub-Transfer Agency Support Services Agreement. For the six months ended August 31, 2018, EVM earned $353 from the Fund pursuant to such agreement, which is included in transfer and dividend disbursing agent fees on the Statement of Operations. Eaton Vance Distributors, Inc. (EVD), an affiliate of EVM and the Fund’s principal underwriter, received distribution and service fees from Investor Class shares (see Note 4).

Trustees and officers of the Fund who are members of EVM’s organization receive remuneration for their services to the Fund out of the investment adviser and administration fee. Trustees of the Fund who are not affiliated with EVM may elect to defer receipt of all or a percentage of their annual fees in accordance with the terms of the Trustees Deferred Compensation Plan. For the six months ended August 31, 2018, no significant amounts have been deferred. Certain officers and Trustees of the Fund are officers of EVM.

4  Distribution Plan

The Fund has in effect a distribution plan for Investor Class shares (Investor Class Plan) pursuant to Rule 12b-1 under the 1940 Act. Pursuant to the Investor Class Plan, the Fund pays EVD a distribution and service fee of 0.25% per annum of its average daily net assets attributable to Investor Class

 

  15  

Parametric Dividend Income Fund

August 31, 2018

 

Notes to Financial Statements (Unaudited) — continued

 

 

shares for distribution services and facilities provided to the Fund by EVD, as well as for personal services and/or the maintenance of shareholder accounts. Distribution and service fees paid or accrued to EVD for the six months ended August 31, 2018 amounted to $7,385 for Investor Class shares.

Distribution and service fees are subject to the limitations contained in the Financial Industry Regulatory Authority Rule 2341(d).

5  Purchases and Sales of Investments

Purchases and sales of investments, other than short-term obligations, aggregated $56,475,430 and $19,864,239, respectively, for the six months ended August 31, 2018.

6  Shares of Beneficial Interest

The Fund’s Declaration of Trust permits the Trustees to issue an unlimited number of full and fractional shares of beneficial interest (without par value). Such shares may be issued in a number of different series (such as the Fund) and classes. Transactions in Fund shares were as follows:

 

Investor Class    Six Months Ended
August 31, 2018
(Unaudited)		      Year Ended
February 28, 2018		  

Sales

      136,793        329,233  

Issued to shareholders electing to receive payments of distributions in Fund shares

      6,174        11,670  

Redemptions

      (46,609 )       (105,850 ) 

Net increase

      96,358        235,053  
Institutional Class    Six Months Ended
August 31, 2018
(Unaudited)		      Year Ended
February 28, 2018		  

Sales

      3,191,545        541,433  

Issued to shareholders electing to receive payments of distributions in Fund shares

      34,297        56,746  

Redemptions

      (564,419 )       (202,527 ) 

Net increase

      2,661,423        395,652  

7  Line of Credit

The Fund participates with other portfolios and funds managed by EVM and its affiliates in a $625 million unsecured line of credit agreement with a group of banks, which is in effect through October 30, 2018. Borrowings are made by the Fund solely to facilitate the handling of unusual and/or unanticipated short-term cash requirements. Interest is charged to the Fund based on its borrowings at an amount above either the Eurodollar rate or Federal Funds rate. In addition, a fee computed at an annual rate of 0.15% on the daily unused portion of the line of credit is allocated among the participating portfolios and funds at the end of each quarter. Because the line of credit is not available exclusively to the Fund, it may be unable to borrow some or all of its requested amounts at any particular time. The Fund did not have any significant borrowings or allocated fees during the six months ended August 31, 2018.

8  Fair Value Measurements

Under generally accepted accounting principles for fair value measurements, a three-tier hierarchy to prioritize the assumptions, referred to as inputs, is used in valuation techniques to measure fair value. The three-tier hierarchy of inputs is summarized in the three broad levels listed below.

 

•  

Level 1 – quoted prices in active markets for identical investments

 

•  

Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.)

 

•  

Level 3 – significant unobservable inputs (including a fund’s own assumptions in determining the fair value of investments)

In cases where the inputs used to measure fair value fall in different levels of the fair value hierarchy, the level disclosed is determined based on the lowest level input that is significant to the fair value measurement in its entirety. The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.

 

  16  

Parametric Dividend Income Fund

August 31, 2018

 

Notes to Financial Statements (Unaudited) — continued

 

 

At August 31, 2018, the hierarchy of inputs used in valuing the Fund’s investments, which are carried at value, were as follows:

 

Asset Description    Level 1      Level 2      Level 3      Total  

Common Stocks

    $ 65,568,365 *     $ —      $         —      $ 65,568,365  

Short-Term Investments

      —        207,157        —        207,157  

Total Investments

    $ 65,568,365      $ 207,157      $ —      $ 65,775,522  

 

*

The level classification by major category of investments is the same as the category presentation in the Portfolio of Investments.

 

  17  

Parametric Dividend Income Fund

August 31, 2018

 

Special Meeting of Shareholders (Unaudited)

 

 

The Fund held a Special Meeting of Shareholders on September 20, 2018 to elect the five Trustees listed below. The other Trustees named herein continue to serve as Trustees. The results of the vote with respect to the Fund were as follows:

 

     Number of Shares  
Nominee for Trustee    For      Withheld  

Mark R. Fetting

      3,012,154        49,215  

Keith Quinton

      3,012,154        49,215  

Marcus L. Smith

      3,012,154        49,215  

Susan J. Sutherland

      3,012,154        49,215  

Scott E. Wennerholm

      3,012,154        49,215  

Results are rounded to the nearest whole number.

 

  18  

Parametric Dividend Income Fund

August 31, 2018

 

Board of Trustees’ Contract Approval

 

 

Overview of the Contract Review Process

The Investment Company Act of 1940, as amended (the “1940 Act”), provides, in substance, that each investment advisory agreement between a fund and its investment adviser will continue in effect from year to year only if its continuation is approved at least annually by the fund’s board of trustees, including by a vote of a majority of the trustees who are not “interested persons” of the fund (“Independent Trustees”), cast in person at a meeting called for the purpose of considering such approval.

At a meeting of the Boards of Trustees (each a “Board”) of the registered investment companies advised by either Eaton Vance Management or its affiliate, Boston Management and Research, (the “Eaton Vance Funds”) held on April 24, 2018, the Board, including a majority of the Independent Trustees, voted to approve continuation of existing investment advisory and sub-advisory agreements for the Eaton Vance Funds for an additional one-year period. In voting its approval, the Board relied upon the affirmative recommendation of its Contract Review Committee, which is a committee comprised exclusively of Independent Trustees. Prior to making its recommendation, the Contract Review Committee reviewed information furnished by each adviser to the Eaton Vance Funds (including information specifically requested by the Board) for a series of meetings of the Contract Review Committee held between February and April 2018. The Contract Review Committee also considered information received at prior meetings of the Board and its committees, as relevant to its annual evaluation of the investment advisory and sub-advisory agreements.

The information that the Board considered included, among other things, the following (for funds that invest through one or more underlying portfolio(s), references to “each fund” in this section may include information that was considered at the portfolio-level):

Information about Fees, Performance and Expenses

 

•  

A report from an independent data provider comparing the advisory and related fees paid by each fund with fees paid by comparable funds as identified by the independent data provider (“comparable funds”);

 

•  

A report from an independent data provider comparing each fund’s total expense ratio and its components to comparable funds;

 

•  

A report from an independent data provider comparing the investment performance of each fund (including, where relevant, yield data, Sharpe ratios and information ratios) to the investment performance of comparable funds over various time periods;

 

•  

Data regarding investment performance in comparison to benchmark indices, as well as customized groups of peer funds and blended indices identified by the adviser in consultation with the Board;

 

•  

For each fund, comparative information concerning the fees charged and the services provided by each adviser in managing other accounts (including mutual funds, other collective investment funds and institutional accounts) using investment strategies and techniques similar to those used in managing such fund;

 

•  

Profitability analyses for each adviser with respect to each fund;

Information about Portfolio Management and Trading

 

•  

Descriptions of the investment management services provided to each fund, including the fund’s investment strategies and policies;

 

•  

The procedures and processes used to determine the fair value of fund assets and actions taken to monitor and test the effectiveness of such procedures and processes;

 

•  

Information about each adviser’s policies and practices with respect to trading, including each adviser’s processes for monitoring best execution of portfolio transactions;

 

•  

Information about the allocation of brokerage transactions and the benefits received by each adviser as a result of brokerage allocation, including information concerning the acquisition of research through client commission arrangements and policies with respect to “soft dollars”;

 

•  

Data relating to portfolio turnover rates of each fund;

Information about each Adviser

 

•  

Reports detailing the financial results and condition of each adviser;

 

•  

Descriptions of the qualifications, education and experience of the individual investment professionals whose responsibilities include portfolio management and investment research for the funds, and information relating to their responsibilities with respect to managing other mutual funds and investment accounts;

 

•  

The Code of Ethics of each adviser and its affiliates, together with information relating to compliance with and the administration of such codes;

 

•  

Policies and procedures relating to proxy voting and the handling of corporate actions and class actions;

 

•  

Information concerning the resources devoted to compliance efforts undertaken by each adviser and its affiliates (including descriptions of various compliance programs) and their record of compliance;

 

•  

Information concerning the business continuity and disaster recovery plans of each adviser and its affiliates;

 

•  

A description of Eaton Vance Management’s procedures for overseeing third party advisers and sub-advisers, including with respect to regulatory and compliance issues, investment management and other matters;

 

  19  

Parametric Dividend Income Fund

August 31, 2018

 

Board of Trustees’ Contract Approval — continued

 

 

Other Relevant Information

 

•  

Information concerning the nature, cost and character of the administrative and other non-investment advisory services provided by Eaton Vance Management and its affiliates;

 

•  

Information concerning management of the relationship with the custodian, subcustodians and fund accountants by each adviser or the funds’ administrator; and

 

•  

The terms of each investment advisory agreement.

Over the course of the twelve-month period ended April 30, 2018, with respect to one or more funds, the Board met seven times and the Contract Review Committee, the Audit Committee, the Governance Committee, the Portfolio Management Committee and the Compliance Reports and Regulatory Matters Committee, each of which is a Committee comprised solely of Independent Trustees, met seven, thirteen, six, eight and nine times, respectively. At such meetings, the Trustees participated in investment and performance reviews with the portfolio managers and other investment professionals of each investment adviser relating to each fund, and considered various investment and trading strategies used in pursuing each fund’s investment objective, such as the use of derivative instruments, as well as risk management techniques. The Board and its Committees also evaluated issues pertaining to industry and regulatory developments, compliance procedures, fund governance and other issues with respect to the funds, and received and participated in reports and presentations provided by Eaton Vance Management and other fund advisers with respect to such matters. In addition to the formal meetings of the Board and its Committees, the Independent Trustees hold regular teleconferences in between meetings to discuss, among other topics, matters relating to the continuation of investment advisory and sub-advisory agreements.

For funds that invest through one or more underlying portfolios, the Board considered similar information about the portfolio(s) when considering the approval of investment advisory agreements. In addition, in cases where the fund’s investment adviser has engaged a sub-adviser, the Board considered similar information about the sub-adviser when considering the approval of any sub-advisory agreement.

The Contract Review Committee was assisted throughout the contract review process by Goodwin Procter LLP, independent legal counsel for the Independent Trustees. The members of the Contract Review Committee relied upon the advice of such counsel and their own business judgment in determining the material factors to be considered in evaluating each investment advisory and sub-advisory agreement and the weight to be given to each such factor. The conclusions reached with respect to each investment advisory and sub-advisory agreement were based on a comprehensive evaluation of all the information provided and not any single factor. Moreover, each member of the Contract Review Committee may have placed varying emphasis on particular factors in reaching conclusions with respect to each investment advisory and sub-advisory agreement. In evaluating each investment advisory and sub-advisory agreement, including the specific fee structures and other terms of the agreements, the Contract Review Committee was informed by multiple years of analysis and discussion among the Independent Trustees and the Eaton Vance Funds’ advisers and sub-advisers.

Results of the Process

Based on its consideration of the foregoing, and such other information as it deemed relevant, including the factors and conclusions described below, the Contract Review Committee concluded that the continuation of the investment advisory and administrative agreement of Parametric Dividend Income Fund (the “Fund”) with Eaton Vance Management (the “Adviser”) and the sub-advisory agreement with Parametric Portfolio Associates LLC (the “Sub-adviser”), an affiliate of the Adviser, including their fee structures, is in the interests of shareholders and, therefore, the Contract Review Committee recommended to the Board approval of each agreement. The Board accepted the recommendation of the Contract Review Committee based on the material factors considered and conclusions reached by the Contract Review Committee with respect to the agreements. Accordingly, the Board, including a majority of the Independent Trustees, voted to approve continuation of the investment advisory and administrative agreement and the sub-advisory agreement for the Fund.

Nature, Extent and Quality of Services

In considering whether to approve the investment advisory and administrative agreement and the sub-advisory agreement of the Fund, the Board evaluated the nature, extent and quality of services provided to the Fund by the Adviser and the Sub-adviser.

The Board considered the Adviser’s and the Sub-adviser’s management capabilities and investment process with respect to the types of investments held by the Fund, including the education, experience and number of its investment professionals and other personnel who provide portfolio management, investment research, and similar services to the Fund. With respect to the Adviser, the Board considered the Adviser’s responsibilities overseeing the Sub-adviser and coordinating activities in implementing the Fund’s investment strategies. With respect to the Sub-adviser, the Board considered the Sub-adviser’s investment process, investment research and similar functions with respect to the types of investments held by the Fund. In particular, the Board considered the experience of the Sub-adviser’s investment professionals in employing a top-down, disciplined and systematic investment process that emphasizes a diversified portfolio of quality companies that have historically demonstrated high current income and lower levels of stock price volatility. The Board also took into account the resources dedicated to portfolio management and other services, as well as the compensation methods of the Adviser and other factors, such as the reputation and resources of the Adviser to recruit and retain highly qualified research, advisory and supervisory investment professionals. In addition, the Board considered the time and attention devoted to the Eaton Vance Funds, including the Fund, by senior management, as well as the infrastructure, operational capabilities and support staff in place to assist in the portfolio management and operations of the Fund, including the provision of administrative services. The Board also considered the business-related and other risks to which the Adviser or its affiliates may be subject in managing the Fund.

 

  20  

Parametric Dividend Income Fund

August 31, 2018

 

Board of Trustees’ Contract Approval — continued

 

 

The Board considered the compliance programs of the Adviser and relevant affiliates thereof, including the Sub-adviser. Among other matters, the Board considered compliance and reporting matters relating to personal trading by investment professionals, selective disclosure of portfolio holdings, late trading, frequent trading, portfolio valuation, business continuity and the allocation of investment opportunities. The Board also considered the responses of the Adviser and its affiliates to requests in recent years from regulatory authorities such as the Securities and Exchange Commission and the Financial Industry Regulatory Authority.

The Board considered shareholder and other administrative services provided or managed by Eaton Vance Management and its affiliates, including transfer agency and accounting services. The Board evaluated the benefits to shareholders of investing in a fund that is a part of a large fund complex offering exposure to a variety of asset classes and investment disciplines, as well as the ability, in many cases, to exchange an investment among different funds without incurring additional sales charges.

After consideration of the foregoing factors, among others, the Board concluded that the nature, extent and quality of services provided by the Adviser and the Sub-adviser, taken as a whole, are appropriate and consistent with the terms of the investment advisory and administrative agreement and the sub-advisory agreement.

Fund Performance

The Board compared the Fund’s investment performance to that of comparable funds and appropriate benchmark indices. The Board’s review included comparative performance data for the one and three-year periods ended September 30, 2017 for the Fund. In this regard, the Board noted that the performance of the Fund was higher than the median performance of the Fund’s peer group for the three-year period. The Board also noted that the performance of the Fund was higher than its benchmark index for the three-year period. The Board concluded that the performance of the Fund was satisfactory.

Management Fees and Expenses

The Board considered contractual fee rates payable by the Fund for advisory and administrative services (referred to collectively as “management fees”). As part of its review, the Board considered the Fund’s management fees and total expense ratio for the one year period ended September 30, 2017, as compared to those of comparable funds, before and after giving effect to any undertaking to waive fees or reimburse expenses. The Board also received and considered information about the services offered and the fee rates charged by the Adviser and/or Sub-adviser to other types of clients with investment objectives and strategies that are substantially similar to and/or managed in a similar investment style as the Fund. In this regard, the Board received information about the differences in the nature and scope of services the Adviser and/or Sub-adviser provide to the Fund as compared to other types of clients and the material differences in compliance, reporting and other legal burdens and risks to the Adviser and/or Sub-adviser as between the Fund and other types of clients. The Board also considered factors that had an impact on Fund expense ratios relative to comparable funds.

After considering the foregoing information, and in light of the nature, extent and quality of the services provided by the Adviser and the Sub-adviser, the Board concluded that the management fees charged for advisory and related services are reasonable.

Profitability and Other “Fall-Out” Benefits

The Board considered the level of profits realized by the Adviser and relevant affiliates thereof, including the Sub-adviser, in providing investment advisory and administrative services to the Fund and to all Eaton Vance Funds as a group. The Board considered the level of profits realized without regard to marketing support or other payments by the Adviser and its affiliates to third parties in respect of distribution services. The Board also considered other direct or indirect fall-out benefits received by the Adviser and its affiliates, including the Sub-adviser, in connection with their relationships with the Fund, including the benefits of research services that may be available to the Adviser or the Sub-adviser as a result of securities transactions effected for the Fund and other investment advisory clients.

The Board concluded that, in light of the foregoing factors and the nature, extent and quality of the services rendered, the profits realized by the Adviser and its affiliates, including the Sub-adviser, are deemed not to be excessive.

Economies of Scale

In reviewing management fees and profitability, the Board also considered the extent to which the Adviser and its affiliates, on the one hand, and the Fund, on the other hand, can expect to realize benefits from economies of scale as the assets of the Fund increase. The Board acknowledged the difficulty in accurately measuring the benefits resulting from economies of scale, if any, with respect to the management of any specific fund or group of funds. The Board reviewed data summarizing the increases and decreases in the assets of the Fund and of all Eaton Vance Funds as a group over various time periods, and evaluated the extent to which the total expense ratio of the Fund and the profitability of the Adviser and its affiliates may have been affected by such increases or decreases. Based upon the foregoing, the Board concluded that the Fund currently shares in any benefits from economies of scale. The Board also concluded that, assuming reasonably foreseeable increases in the assets of the Fund, the structure of the advisory fee, which includes breakpoints at several asset levels, will allow the Fund to continue to benefit from any economies of scale in the future.

 

  21  

Parametric Dividend Income Fund

August 31, 2018

 

Officers and Trustees

 

 

Officers of Parametric Dividend Income Fund

 

 

Payson F. Swaffield

President

Maureen A. Gemma

Vice President, Secretary and

Chief Legal Officer

James F. Kirchner

Treasurer

Richard F. Froio

Chief Compliance Officer

 

 

Trustees of Parametric Dividend Income Fund

 

 

William H. Park

Chairperson

Thomas E. Faust Jr.*

Mark R. Fetting

Cynthia E. Frost

George J. Gorman

Valerie A. Mosley

Helen Frame Peters

Keith Quinton(1)

Marcus L. Smith(1)

Susan J. Sutherland

Harriett Tee Taggart

Scott E. Wennerholm

 

 

*

Interested Trustee

 

(1) 

Messrs. Quinton and Smith began serving as Trustees effective October 1, 2018.

 

  22  

Eaton Vance Funds

 

IMPORTANT NOTICES

 

 

Privacy.  The Eaton Vance organization is committed to ensuring your financial privacy. Each of the financial institutions identified below has in effect the following policy (“Privacy Policy”) with respect to nonpublic personal information about its customers:

 

•  

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

 

•  

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

 

•  

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

 

•  

We reserve the right to change our Privacy Policy at any time upon proper notification to you. Customers may want to review our Privacy Policy periodically for changes by accessing the link on our homepage: www.eatonvance.com.

Our pledge of privacy applies to the following entities within the Eaton Vance organization: the Eaton Vance Family of Funds, Eaton Vance Management, Eaton Vance Investment Counsel, Eaton Vance Distributors, Inc., Eaton Vance Trust Company, Eaton Vance Management (International) Limited, Eaton Vance Advisers International Ltd., Eaton Vance Management’s Real Estate Investment Group and Boston Management and Research. In addition, our Privacy Policy applies only to those Eaton Vance customers who are individuals and who have a direct relationship with us. If a customer’s account (i.e., fund shares) is held in the name of a third-party financial advisor/broker-dealer, it is likely that only such advisor’s privacy policies apply to the customer. This notice supersedes all previously issued privacy disclosures. For more information about Eaton Vance’s Privacy Policy, please call 1-800-262-1122.

Delivery of Shareholder Documents.  The Securities and Exchange Commission (SEC) permits funds to deliver only one copy of shareholder documents, including prospectuses, proxy statements and shareholder reports, to fund investors with multiple accounts at the same residential or post office box address. This practice is often called “householding” and it helps eliminate duplicate mailings to shareholders. Eaton Vance, or your financial advisor, may household the mailing of your documents indefinitely unless you instruct Eaton Vance, or your financial advisor, otherwise. If you would prefer that your Eaton Vance documents not be householded, please contact Eaton Vance at 1-800-260-0761, or contact your financial advisor. Your instructions that householding not apply to delivery of your Eaton Vance documents will typically be effective within 30 days of receipt by Eaton Vance or your financial advisor.

Portfolio Holdings.  Each Eaton Vance Fund and its underlying Portfolio(s) (if applicable) will file a schedule of portfolio holdings on Form N-Q with the SEC for the first and third quarters of each fiscal year. The Form N-Q will be available on the Eaton Vance website at www.eatonvance.com, by calling Eaton Vance at 1-800-260-0761 or in the EDGAR database on the SEC’s website at www.sec.gov. Form N-Q may also be reviewed and copied at the SEC’s public reference room in Washington, D.C. (call 1-800-732-0330 for information on the operation of the public reference room).

Proxy Voting.  From time to time, funds are required to vote proxies related to the securities held by the funds. The Eaton Vance Funds or their underlying Portfolios (if applicable) vote proxies according to a set of policies and procedures approved by the Funds’ and Portfolios’ Boards. You may obtain a description of these policies and procedures and information on how the Funds or Portfolios voted proxies relating to portfolio securities during the most recent 12-month period ended June 30, without charge, upon request, by calling 1-800-260-0761 and by accessing the SEC’s website at www.sec.gov.

 

  23  

This Page Intentionally Left Blank

Investment Adviser and Administrator

Eaton Vance Management

Two International Place

Boston, MA 02110

Sub-Adviser

Parametric Portfolio Associates LLC

1918 Eighth Avenue, Suite 3100

Seattle, WA 98101

Principal Underwriter*

Eaton Vance Distributors, Inc.

Two International Place

Boston, MA 02110

(617) 482-8260

Custodian

State Street Bank and Trust Company

State Street Financial Center, One Lincoln Street

Boston, MA 02111

Transfer Agent

BNY Mellon Investment Servicing (US) Inc.

Attn: Eaton Vance Funds

P.O. Box 9653

Providence, RI 02940-9653

(800) 260-0761

Fund Offices

Two International Place

Boston, MA 02110

 
*

FINRA BrokerCheck.  Investors may check the background of their Investment Professional by contacting the Financial Industry Regulatory Authority (FINRA). FINRA BrokerCheck is a free tool to help investors check the professional background of current and former FINRA-registered securities firms and brokers. FINRA BrokerCheck is available by calling 1-800-289-9999 and at www.FINRA.org. The FINRA BrokerCheck brochure describing this program is available to investors at www.FINRA.org.

LOGO

 

LOGO

16105    8.31.18

Item 2. Code of Ethics

Not required in this filing.

Item 3. Audit Committee Financial Expert

Not required in this filing.

Item 4. Principal Accountant Fees and Services

Not required in this filing.

Item 5. Audit Committee of Listed Registrants

Not applicable.

Item 6. Schedule of Investments

Please see schedule of investments contained in the Report to Stockholders included under Item 1 of this Form N-CSR.

Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies

Not applicable.

Item 8. Portfolio Managers of Closed-End Management Investment Companies

Not applicable.

Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers

Not applicable.

Item 10. Submission of Matters to a Vote of Security Holders

No material changes.

Item 11. Controls and Procedures

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

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

Item 12. Disclosure of Securities Lending Activities for Closed-End Management Investment Companies

Not applicable.

Item 13. Exhibits

 

(a)(1)

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

 

(a)(2)(i)

Treasurer’s Section 302 certification.

 

(a)(2)(ii)

President’s Section 302 certification.

 

(b)

Combined Section 906 certification.

Signatures

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

Eaton Vance Mutual Funds Trust

 

By:  

/s/ Payson F. Swaffield

  Payson F. Swaffield
  President
Date:   October 22, 2018

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

 

By:  

/s/ James F. Kirchner

  James F. Kirchner
  Treasurer
Date:   October 22, 2018
By:  

/s/ Payson F. Swaffield

  Payson F. Swaffield
  President
Date:   October 22, 2018