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)
Deidre E. Walsh
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, 2022
Date of Reporting Period
Item 1. Reports to Stockholders
Parametric
Dividend Income Fund
Semiannual Report
August 31, 2022
Commodity Futures Trading Commission Registration. The Commodity Futures Trading Commission (“CFTC”) has adopted regulations that subject registered investment companies and advisers to regulation by the CFTC if a fund invests more than a
prescribed level of its assets in certain CFTC-regulated instruments (including futures, certain options and swap agreements) or markets itself as providing investment exposure to such instruments. The investment adviser has claimed an exclusion
from the definition of “commodity pool operator” under the Commodity Exchange Act with respect to its management of the Fund. Accordingly, neither the Fund nor the adviser with respect to the operation of the Fund is subject to CFTC
regulation. Because of its management of other strategies, the Fund's adviser and Parametric Portfolio Associates LLC (Parametric), sub-adviser to the Fund, are registered with the CFTC as commodity pool operators. The adviser and Parametric are
also registered as commodity trading advisors.
Fund
shares are not insured by the FDIC and are not deposits or other obligations of, or guaranteed by, any depository institution. Shares are subject to investment risks, including possible loss of principal invested.
This report must be preceded or accompanied by a current
summary prospectus or prospectus. Before investing, investors should consider carefully the investment objective, risks, and charges and expenses of a mutual fund. This and other important information is contained in the summary prospectus and
prospectus, which can be obtained from a financial intermediary. Prospective investors should read the prospectus carefully before investing. For further information, please call 1-800-260-0761.
Parametric
Dividend Income Fund
August 31, 2022
Performance
Portfolio Manager(s) Thomas C.
Seto and Jennifer Sireklove, CFA, each of Parametric Portfolio Associates LLC
| % Average Annual Total Returns1,2 | Class
Inception Date |
Performance
Inception Date |
Six Months | One Year | Five Years | Since
Inception |
| Class A at NAV | 03/26/2014 | 03/26/2014 | (2.56)% | 1.03% | 8.63% | 9.15% |
| Class A with 5.25% Maximum Sales Charge | — | — | (7.68) | (4.29) | 7.46 | 8.46 |
| Class I at NAV | 03/26/2014 | 03/26/2014 | (2.49) | 1.23 | 8.90 | 9.42 |
|
| ||||||
| Russell 1000® Value Index | — | — | (6.61)% | (6.23)% | 7.86% | 8.09% |
| % Total Annual Operating Expense Ratios3 | Class A | Class I |
| Gross | 0.89% | 0.64% |
| Net | 0.65 | 0.40 |
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. Furthermore, returns do not reflect the deduction of taxes that shareholders may have to
pay on Fund distributions or upon the redemption of Fund shares. Investment return and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Performance for periods less than or equal to
one year is cumulative. Performance is for the stated time period only; due to market volatility, current Fund performance may be lower or higher than the quoted return. For performance as of the most recent month-end, please refer to
eatonvance.com.
2
Parametric
Dividend Income Fund
August 31, 2022
Fund Profile
Footnotes:
| 1 | Excludes cash and cash equivalents. |
3
Parametric
Dividend Income Fund
August 31, 2022
Endnotes and
Additional Disclosures
| 1 | Russell 1000® Value Index is an unmanaged index of U.S. large-cap value stocks. Unless otherwise stated, index returns do not reflect the effect of any applicable sales charges, commissions, expenses, taxes or leverage, as applicable. It is not possible to invest directly in an index. |
| 2 | Total Returns at NAV do not include applicable sales charges. If sales charges were deducted, the returns would be lower. Total Returns shown with maximum sales charge reflect the stated maximum sales charge. Unless otherwise stated, performance does not reflect the deduction of taxes on Fund distributions or redemptions of Fund shares. Performance 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 6/30/23. The expense ratios for the current reporting period can be found in the Financial Highlights section of this report. Performance reflects expenses waived and/or reimbursed, if applicable. Without such waivers and/or reimbursements, performance would have been lower. |
| Fund profile subject to change due to active management. | |
| Important Notice to Shareholders | |
| Effective April 29, 2022, the Fund's Investor Class shares were redesignated as Class A shares. Class A shares are subject to a front-end sales charge, subject to certain exceptions. Former Investor Class shareholders, who established their Fund accounts before April 29, 2022, did not pay a sales charge in connection with the redesignation or will not be subject to this sales charge on future purchases of Class A shares for such accounts. Effective April 29, 2022, the Fund's Institutional Class shares were redesignated as Class I shares. This share class redesignation did not result in changes to the annual operating expenses of Class I or the Fund. |
4
Parametric
Dividend Income Fund
August 31, 2022
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, 2022 to August 31, 2022).
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 (3/1/22) |
Ending
Account Value (8/31/22) |
Expenses
Paid During Period* (3/1/22 – 8/31/22) |
Annualized
Expense Ratio | |
| Actual | ||||
| Class A | $1,000.00 | $ 974.40 | $3.23** | 0.65% |
| Class I | $1,000.00 | $ 975.10 | $1.99** | 0.40% |
| Hypothetical | ||||
| (5% return per year before expenses) | ||||
| Class A | $1,000.00 | $1,021.93 | $3.31** | 0.65% |
| Class I | $1,000.00 | $1,023.19 | $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, 2022. |
| ** | Absent an allocation of certain expenses to affiliates, expenses would be higher. |
5
Parametric
Dividend Income Fund
August 31, 2022
Portfolio of
Investments (Unaudited)
6
See Notes to Financial Statements.
Parametric
Dividend Income Fund
August 31, 2022
Portfolio of
Investments (Unaudited) — continued
7
See Notes to Financial Statements.
Parametric
Dividend Income Fund
August 31, 2022
Portfolio of
Investments (Unaudited) — continued
8
See Notes to Financial Statements.
Parametric
Dividend Income Fund
August 31, 2022
Portfolio of
Investments (Unaudited) — continued
9
See Notes to Financial Statements.
Parametric
Dividend Income Fund
August 31, 2022
Statement of Assets
and Liabilities (Unaudited)
| August 31, 2022 | |
| Assets | |
| Unaffiliated investments, at value (identified cost $84,295,734) — including $1,300,742 of securities on loan | $ 89,764,022 |
| Affiliated investment, at value (identified cost $882,652) | 882,652 |
| Dividends receivable | 239,043 |
| Dividends receivable from affiliated investment | 2,185 |
| Receivable for Fund shares sold | 968,670 |
| Securities lending income receivable | 161 |
| Receivable from affiliates | 18,129 |
| Total assets | $91,874,862 |
| Liabilities | |
| Collateral for securities loaned | $ 384,439 |
| Payable for investments purchased | 668,595 |
| Payable for Fund shares redeemed | 404,201 |
| Payable to affiliates: | |
| Investment adviser and administration fee | 22,852 |
| Distribution and service fees | 648 |
| Accrued expenses | 39,492 |
| Total liabilities | $ 1,520,227 |
| Net Assets | $90,354,635 |
| Sources of Net Assets | |
| Paid-in capital | $ 88,292,010 |
| Distributable earnings | 2,062,625 |
| Net Assets | $90,354,635 |
| Class A Shares | |
| Net Assets | $ 2,925,108 |
| Shares Outstanding | 187,045 |
| Net
Asset Value and Redemption Price Per Share (net assets ÷ shares of beneficial interest outstanding) |
$ 15.64 |
| Maximum
Offering Price Per Share (100 ÷ 94.75 of net asset value per share) |
$ 16.51 |
| Class I Shares | |
| Net Assets | $ 87,429,527 |
| Shares Outstanding | 5,583,235 |
| Net
Asset Value, Offering Price and Redemption Price Per Share (net assets ÷ shares of beneficial interest outstanding) |
$ 15.66 |
| On sales of $50,000 or more, the offering price of Class A shares is reduced. |
10
See Notes to Financial Statements.
Parametric
Dividend Income Fund
August 31, 2022
Statement of
Operations (Unaudited)
| Six Months Ended | |
| August 31, 2022 | |
| Investment Income | |
| Dividend income | $ 1,181,514 |
| Dividend income from affiliated investments | 6,838 |
| Securities lending income, net | 467 |
| Total investment income | $ 1,188,819 |
| Expenses | |
| Investment adviser and administration fee | $ 107,083 |
| Distribution and service fees: | |
| Class A | 3,776 |
| Trustees’ fees and expenses | 3,262 |
| Custodian fee | 17,796 |
| Transfer and dividend disbursing agent fees | 10,919 |
| Legal and accounting services | 21,771 |
| Printing and postage | 452 |
| Registration fees | 19,574 |
| Miscellaneous | 4,307 |
| Total expenses | $ 188,940 |
| Deduct: | |
| Waiver and/or reimbursement of expenses by affiliates | $ 42,701 |
| Total expense reductions | $ 42,701 |
| Net expenses | $ 146,239 |
| Net investment income | $ 1,042,580 |
| Realized and Unrealized Gain (Loss) | |
| Net realized gain (loss): | |
| Investment transactions | $ 494,330 |
| Investment transactions - affiliated investment | (17) |
| Net realized gain | $ 494,313 |
| Change in unrealized appreciation (depreciation): | |
| Investments | $ (4,536,163) |
| Investments - affiliated investment | 14 |
| Net change in unrealized appreciation (depreciation) | $(4,536,149) |
| Net realized and unrealized loss | $(4,041,836) |
| Net decrease in net assets from operations | $(2,999,256) |
11
See Notes to Financial Statements.
Parametric
Dividend Income Fund
August 31, 2022
Statements of Changes
in Net Assets
| Six
Months Ended August 31, 2022 (Unaudited) |
Year
Ended February 28, 2022 | |
| Increase (Decrease) in Net Assets | ||
| From operations: | ||
| Net investment income | $ 1,042,580 | $ 976,803 |
| Net realized gain | 494,313 | 3,110,736 |
| Net change in unrealized appreciation (depreciation) | (4,536,149) | 1,956,275 |
| Net increase (decrease) in net assets from operations | $ (2,999,256) | $ 6,043,814 |
| Distributions to shareholders: | ||
| Class A | $ (32,269) | $ (83,961) |
| Class I | (742,430) | (897,896) |
| Total distributions to shareholders | $ (774,699) | $ (981,857) |
| Transactions in shares of beneficial interest: | ||
| Class A | $ 99,483 | $ (673,893) |
| Class I | 55,546,432 | (140,117) |
| Net increase (decrease) in net assets from Fund share transactions | $55,645,915 | $ (814,010) |
| Net increase in net assets | $51,871,960 | $ 4,247,947 |
| Net Assets | ||
| At beginning of period | $ 38,482,675 | $ 34,234,728 |
| At end of period | $90,354,635 | $38,482,675 |
12
See Notes to Financial Statements.
Parametric
Dividend Income Fund
August 31, 2022
Financial
Highlights
| Class A | ||||||
| Six
Months Ended August 31, 2022 (Unaudited) |
Year Ended February 28, | Year
Ended February 29, 2020 |
Year Ended February 28, | |||
| 2022 | 2021 | 2019 | 2018 | |||
| Net asset value — Beginning of period | $ 16.230 | $ 14.130 | $ 11.950 | $ 12.870 | $ 12.910 | $ 12.170 |
| Income (Loss) From Operations | ||||||
| Net investment income(1) | $ 0.209 | $ 0.377 | $ 0.349 | $ 0.362 | $ 0.366 | $ 0.328 |
| Net realized and unrealized gain (loss) | (0.624) | 2.105 | 2.194 | (0.950) | 0.216 | 0.854 |
| Total income (loss) from operations | $ (0.415) | $ 2.482 | $ 2.543 | $ (0.588) | $ 0.582 | $ 1.182 |
| Less Distributions | ||||||
| From net investment income | $ (0.175) | $ (0.382) | $ (0.363) | $ (0.325) | $ (0.306) | $ (0.305) |
| From net realized gain | — | — | — | (0.007) | (0.316) | (0.137) |
| Total distributions | $ (0.175) | $ (0.382) | $ (0.363) | $ (0.332) | $ (0.622) | $ (0.442) |
| Net asset value — End of period | $15.640 | $16.230 | $14.130 | $11.950 | $12.870 | $12.910 |
| Total Return(2)(3) | (2.56)% (4) | 17.74% | 22.15% | (4.76)% | 4.81% | 9.87% |
| Ratios/Supplemental Data | ||||||
| Net assets, end of period (000's omitted) | $ 2,925 | $ 2,943 | $ 3,140 | $ 3,612 | $ 6,597 | $ 5,633 |
| Ratios (as a percentage of average daily net assets): | ||||||
| Expenses (3) | 0.65% (5)(6) | 0.65% | 0.65% | 0.65% | 0.65% | 0.65% |
| Net investment income | 2.57% (5) | 2.39% | 2.92% | 2.78% | 2.82% | 2.61% |
| Portfolio Turnover | 28% (4) | 45% | 61% | 51% | 77% | 30% |
| (1) | Computed using average shares outstanding. |
| (2) | Returns are historical and are calculated by determining the percentage change in net asset value with all distributions reinvested and do not reflect the effect of sales charges. |
| (3) | The investment adviser and administrator and the sub-adviser reimbursed certain operating expenses (equal to 0.12%, 0.24%, 0.34%, 0.17%, 0.26% and 0.62% of average daily net assets for the six months ended August 31, 2022 and the years ended February 28, 2022 and 2021, February 29, 2020 and February 28, 2019 and 2018, respectively). Absent this reimbursement, total return would be lower. |
| (4) | Not annualized. |
| (5) | Annualized. |
| (6) | Includes a reduction by the investment adviser and administrator of a portion of the Fund’s investment adviser and administration fee due to the Fund’s investment in the Liquidity Fund (equal to less than 0.005% of average daily net assets for the six months ended August 31, 2022). |
13
See Notes to Financial Statements.
Parametric
Dividend Income Fund
August 31, 2022
Financial
Highlights — continued
| Class I | ||||||
| Six
Months Ended August 31, 2022 (Unaudited) |
Year Ended February 28, | Year
Ended February 29, 2020 |
Year Ended February 28, | |||
| 2022 | 2021 | 2019 | 2018 | |||
| Net asset value — Beginning of period | $ 16.260 | $ 14.150 | $ 11.970 | $ 12.890 | $ 12.930 | $ 12.190 |
| Income (Loss) From Operations | ||||||
| Net investment income(1) | $ 0.237 | $ 0.420 | $ 0.380 | $ 0.394 | $ 0.399 | $ 0.358 |
| Net realized and unrealized gain (loss) | (0.641) | 2.111 | 2.195 | (0.947) | 0.215 | 0.851 |
| Total income (loss) from operations | $ (0.404) | $ 2.531 | $ 2.575 | $ (0.553) | $ 0.614 | $ 1.209 |
| Less Distributions | ||||||
| From net investment income | $ (0.196) | $ (0.421) | $ (0.395) | $ (0.360) | $ (0.338) | $ (0.332) |
| From net realized gain | — | — | — | (0.007) | (0.316) | (0.137) |
| Total distributions | $ (0.196) | $ (0.421) | $ (0.395) | $ (0.367) | $ (0.654) | $ (0.469) |
| Net asset value — End of period | $15.660 | $16.260 | $14.150 | $11.970 | $12.890 | $12.930 |
| Total Return(2)(3) | (2.49)% (4) | 18.09% | 22.47% | (4.50)% | 5.06% | 10.09% |
| Ratios/Supplemental Data | ||||||
| Net assets, end of period (000’s omitted) | $ 87,430 | $ 35,539 | $ 31,094 | $ 43,096 | $ 51,344 | $ 21,110 |
| Ratios (as a percentage of average daily net assets): | ||||||
| Expenses (3) | 0.40% (5)(6) | 0.40% | 0.40% | 0.40% | 0.40% | 0.40% |
| Net investment income | 2.92% (5) | 2.66% | 3.19% | 3.01% | 3.07% | 2.84% |
| Portfolio Turnover | 28% (4) | 45% | 61% | 51% | 77% | 30% |
| (1) | Computed using average shares outstanding. |
| (2) | Returns are historical and are calculated by determining the percentage change in net asset value with all distributions reinvested. |
| (3) | The investment adviser and administrator and the sub-adviser reimbursed certain operating expenses (equal to 0.12%, 0.24%, 0.34%, 0.17%, 0.26% and 0.62% of average daily net assets for the six months ended August 31, 2022 and the years ended February 28, 2022 and 2021, February 29, 2020 and February 28, 2019 and 2018, respectively). Absent this reimbursement, total return would be lower. |
| (4) | Not annualized. |
| (5) | Annualized. |
| (6) | Includes a reduction by the investment adviser and administrator of a portion of the Fund’s investment adviser and administration fee due to the Fund’s investment in the Liquidity Fund (equal to less than 0.005% of average daily net assets for the six months ended August 31, 2022). |
14
See Notes to Financial Statements.
Parametric
Dividend Income Fund
August 31, 2022
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 two classes of shares. Class A (renamed from Investor Class effective April 29, 2022) shares are generally sold subject to a sales charge imposed at time of purchase. Former
Investor Class shareholders, who established their Fund accounts before April 29, 2022, did not pay a sales charge in connection with the redesignation or will not be subject to this sales charge on future purchases of Class A shares for such
accounts. Class I (renamed from Institutional Class effective April 29, 2022) shares are sold at net asset value and are not subject to a sales charge. Each class represents a pro-rata interest in the Fund, but votes separately on class-specific
matters and (as noted below) is subject to different expenses. Realized and unrealized gains and losses and net investment income and losses, other than class-specific expenses, are allocated daily to each class of shares based on the relative net
assets of each class to the total net assets of the Fund. Each class of shares differs in its distribution plan and certain other class-specific expenses.
The following is a summary of significant accounting policies
of the Fund. The policies are in conformity with accounting principles generally accepted in the United States of America (U.S. GAAP). The Fund is an investment company and follows accounting and reporting guidance in the Financial Accounting
Standards Board (FASB) Accounting Standards Codification Topic 946.
A Investment
Valuation—The following methodologies are used to determine the market value or fair value of
investments.
Equity Securities. Equity securities listed on a U.S. securities exchange generally are valued at the last sale or closing price on the day of valuation or, if no sales took place on such date, at the mean between the closing bid and ask
prices on the exchange where such securities are principally traded. Equity securities listed on the NASDAQ National Market System are valued at the NASDAQ official closing price. Unlisted or listed securities for which closing sales prices or
closing quotations are not available are valued at the mean between the latest available bid and ask prices.
Other. Investments in
management investment companies (including money market funds) that do not trade on an exchange are valued at the net asset value as of the close of each business day.
Fair Valuation. Investments for
which valuations or market quotations are not readily available or are deemed unreliable are valued at fair value using methods determined in good faith by or at the direction of the Trustees of the Fund in a manner that most fairly reflects the
security’s “fair value”, which is the amount that the Fund might reasonably expect to receive for the security upon its current sale in the ordinary course. Each such determination is based on a consideration of relevant factors,
which are likely to vary from one pricing context to another. These factors may include, but are not limited to, the type of security, the existence of any contractual restrictions on the security’s disposition, the price and extent of public
trading in similar securities of the issuer or of comparable companies or entities, quotations or relevant information obtained from broker/dealers or other market participants, information obtained from the issuer, analysts, and/or the appropriate
stock exchange (for exchange-traded securities), an analysis of the company’s or entity’s financial statements, and an evaluation of the forces that influence the issuer and the market(s) in which the security is purchased and
sold.
B Investment Transactions—Investment transactions for financial statement purposes are accounted for on a trade date basis. Realized
gains and losses on investments sold are determined on the basis of identified cost.
C Income—Dividend income is recorded on the ex-dividend date for dividends received in cash and/or securities.
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, 2022, the Fund had
no uncertain tax positions that would require financial statement recognition, de-recognition, or disclosure. The Fund files a U.S. federal income tax return annually after its fiscal year-end, which is subject to examination by the Internal
Revenue Service for a period of three years from the date of filing.
E Expenses—The majority of expenses of the Trust are directly identifiable to an individual fund. Expenses which are not readily identifiable to a specific
fund are allocated taking into consideration, among other things, the nature and type of expense and the relative size of the funds.
F Use of
Estimates—The preparation of the financial statements in conformity with U.S. GAAP requires management
to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of income and expense during the reporting period. Actual results could differ from those
estimates.
G Indemnifications—Under the Trust’s organizational documents, its officers and Trustees may be indemnified against
certain liabilities and expenses arising out of the performance of their duties to the Fund. Under Massachusetts law, if certain conditions prevail, shareholders of a Massachusetts business trust (such as the Trust) could be deemed to have personal
liability for the obligations of the Trust. However, the Trust’s Declaration of Trust contains an express disclaimer of liability on the part of Fund shareholders and the By-laws provide that the Trust shall assume, upon request by the
shareholder, the defense on behalf of any Fund shareholders. Moreover, the By-laws also provide for indemnification out of Fund property of any shareholder held personally 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,
15
Parametric
Dividend Income Fund
August 31, 2022
Notes to Financial
Statements (Unaudited) — continued
the Fund enters into
agreements with service providers that may contain indemnification clauses. The Fund's maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred.
H Interim Financial Statements—The interim financial statements relating to August 31, 2022 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.
At February 28, 2022, the Fund, for federal income tax
purposes, had deferred capital losses of $2,277,023 which would reduce its taxable income arising from future net realized gains on investment transactions, if any, to the extent permitted by the Internal Revenue Code, and thus would reduce the
amount of distributions to shareholders, which would otherwise be necessary to relieve the Fund of any liability for federal income or excise tax. The deferred capital losses are treated as arising on the first day of the Fund’s next taxable
year and retain the same short-term or long-term character as when originally deferred. Of the deferred capital losses at February 28, 2022, $1,856,018 are short-term and $421,005 are long-term.
The cost and unrealized appreciation (depreciation) of
investments of the Fund at August 31, 2022, as determined on a federal income tax basis, were as follows:
| Aggregate cost | $ 87,197,899 |
| Gross unrealized appreciation | $ 5,963,895 |
| Gross unrealized depreciation | (2,515,120) |
| Net unrealized appreciation | $ 3,448,775 |
3 Investment Adviser and Administration Fee and
Other Transactions with Affiliates
The investment adviser
and administration fee is earned by Eaton Vance Management (EVM), an indirect, wholly-owned subsidiary of Morgan Stanley, as compensation for investment advisory and administrative services rendered to the Fund. The investment adviser and
administration fee is computed at an annual rate as a percentage of the Fund’s average daily net assets as follows and is payable monthly:
| Average Daily Net Assets | Annual Fee Rate |
| Up to $1 billion | 0.3000% |
| $1 billion but less than $2.5 billion | 0.2875% |
| $2.5 billion but less than $5 billion | 0.2750% |
| $5 billion and over | 0.2675% |
For the six months ended August 31,
2022, the investment adviser and administration fee amounted to $107,083 or 0.30% (annualized) of the Fund’s average daily net assets. Pursuant to an investment sub-advisory agreement, EVM has delegated the investment management of the Fund to
Parametric Portfolio Associates LLC (Parametric), an affiliate of EVM and an indirect, wholly-owned subsidiary of Morgan Stanley. EVM pays Parametric a portion of its investment adviser and administration fee for sub-advisory services provided to
the Fund.
Effective April 26, 2022, the Fund may invest
in a money market fund, the Institutional Class of the Morgan Stanley Institutional Liquidity Funds - Government Portfolio (the “Liquidity Fund”), an open-end management investment company managed by Morgan Stanley Investment Management
Inc., a wholly-owned subsidiary of Morgan Stanley. The investment adviser and administration fee paid by the Fund is reduced by an amount equal to its pro-rata share of the advisory and administration fees paid by the Fund due to its investment in
the Liquidity Fund. For the six months ended August 31, 2022, the
16
Parametric
Dividend Income Fund
August 31, 2022
Notes to Financial
Statements (Unaudited) — continued
investment adviser
and administration fee paid was reduced by $706 relating to the Fund’s investment in the Liquidity Fund. Prior to April 26, 2022, the Fund may have invested its cash in Eaton Vance Cash Reserves Fund, LLC (Cash Reserves Fund), an affiliated
investment company managed by EVM. EVM did not 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 and excluding such expenses as brokerage commissions, acquired fund fees and expenses of unaffiliated funds, borrowing costs, taxes or
litigation expenses) exceed 0.65% and 0.40% of the Fund’s average daily net assets for Class A and Class I, respectively. This agreement may be changed or terminated after June 30, 2023. Pursuant to this agreement, EVM and Parametric were
allocated $41,995 in total of the Fund's operating expenses for the six months ended August 31, 2022.
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, 2022, EVM earned $395 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 Class A 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, 2022, no significant amounts have been deferred. Certain officers and Trustees of the Fund are officers of EVM.
4 Distribution Plan
The Fund has in effect a distribution plan for Class A shares
(Class A Plan) pursuant to Rule 12b-1 under the 1940 Act. Pursuant to the Class A Plan, the Fund pays EVD a distribution and service fee of 0.25% per annum of its average daily net assets attributable to Class A shares for distribution services and
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, 2022 amounted to $3,776 for Class A
shares.
Distribution and service fees are subject to the
limitations contained in the Financial Industry Regulatory Authority Rule 2341(d).
5 Contingent Deferred Sales Charges
Class A shares may be subject to a 1.00% contingent deferred
sales charge (CDSC) if redeemed within 12 months of purchase (depending on the circumstances of purchase). Redemptions of Class A shares by former Investor Class shareholders are not subject to a CDSC. Generally, the CDSC is based upon the lower of
the net asset value at date of redemption or date of purchase. No charge is levied on shares acquired by reinvestment of dividends or capital gain distributions. For the six months ended August 31, 2022, the Fund was informed that EVD received no
CDSCs paid by Class A shareholders.
6 Purchases and Sales of Investments
Purchases and sales of investments, other than short-term
obligations, aggregated $74,550,250 and $19,205,570, respectively, for the six months ended August 31, 2022.
17
Parametric
Dividend Income Fund
August 31, 2022
Notes to Financial
Statements (Unaudited) — continued
7 Shares of Beneficial Interest
The Fund’s Declaration of Trust permits the Trustees to
issue an unlimited number of full and fractional shares of beneficial interest (without par value). Such shares may be issued in a number of different series (such as the Fund) and classes. Transactions in Fund shares were as follows:
| Six
Months Ended August 31, 2022 (Unaudited) |
Year
Ended February 28, 2022 | ||||
| Shares | Amount | Shares | Amount | ||
| Class A | |||||
| Sales | 16,277 | $ 266,505 | 25,845 | $ 408,706 | |
| Issued to shareholders electing to receive payments of distributions in Fund shares | 2,054 | 32,269 | 5,464 | 83,961 | |
| Redemptions | (12,578) | (199,291) | (72,264) | (1,166,560) | |
| Net increase (decrease) | 5,753 | $ 99,483 | (40,955) | $ (673,893) | |
| Class I | |||||
| Sales | 3,789,690 | $ 61,809,213 | 406,269 | $ 6,403,457 | |
| Issued to shareholders electing to receive payments of distributions in Fund shares | 15,379 | 238,822 | 19,992 | 308,263 | |
| Redemptions | (407,579) | (6,501,603) | (437,583) | (6,851,837) | |
| Net increase (decrease) | 3,397,490 | $55,546,432 | (11,322) | $ (140,117) | |
8 Line of Credit
The Fund participates with other portfolios and funds managed
by EVM and its affiliates in an $800 million unsecured line of credit agreement with a group of banks, which is in effect through October 25, 2022. Borrowings are made by the Fund solely for temporary purposes related to redemptions and other
short-term cash needs. Interest is charged to the Fund based on its borrowings at an amount above either the Secured Overnight Financing Rate (SOFR) 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. In connection with the renewal of the agreement in October 2021, an arrangement fee totaling $150,000 was incurred that was allocated
to the participating portfolios and funds. 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, 2022.
9 Securities Lending Agreement
The Fund has established a securities lending agreement with
State Street Bank and Trust Company (SSBT) as securities lending agent in which the Fund lends portfolio securities to qualified borrowers in exchange for collateral consisting of either cash or securities issued or guaranteed by the U.S. government
or its agencies or instrumentalities in an amount at least equal to the market value of the securities on loan. The market value of securities loaned is determined daily and any additional required collateral is delivered to the Fund on the next
business day. Cash collateral is invested in the State Street Navigator Securities Lending Government Money Market Portfolio, a money market fund registered under the 1940 Act. The Fund earns interest on the amount invested but it must pay (and at
times receive from) the broker a loan rebate fee computed as a varying percentage of the collateral received. For security loans secured by non-cash collateral, the Fund earns a negotiated lending fee from the borrower. A portion of the income
earned by the Fund from its investment of cash collateral, net of rebate fees, and lending fees received is allocated to SSBT for its services as lending agent and the portion allocated to the Fund is presented as securities lending income, net on
the Statement of Operations. Non-cash collateral is held by the lending agent on behalf of the Fund and cannot be sold or re-pledged by the Fund; accordingly, such collateral is not reflected in the Statement of Assets and Liabilities.
The Fund is subject to possible delay in the recovery of loaned
securities. Pursuant to the securities lending agreement, SSBT has provided indemnification to the Fund in the event of default by a borrower with respect to a loan. The Fund bears the risk of loss with respect to the investment of cash
collateral.
At August 31, 2022, the value of the
securities loaned and the value of the collateral received, which exceeded the value of the securities loaned, amounted to $1,300,742 and $1,370,220, respectively. Collateral received was comprised of cash of $384,439 and U.S. government and/or
agencies securities of $985,781. The securities lending transactions have no contractual maturity date and each of the Fund and borrower has the option to terminate a loan at any time.
18
Parametric
Dividend Income Fund
August 31, 2022
Notes to Financial
Statements (Unaudited) — continued
The
following table provides a breakdown of securities lending transactions accounted for as secured borrowings, the obligations by class of collateral pledged, and the remaining contractual maturity of those transactions as of August 31, 2022.
| Remaining Contractual Maturity of the Transactions | |||||
| Overnight
and Continuous |
<30 days | 30 to 90 days | >90 days | Total | |
| Common Stocks | $384,439 | $ — | $ — | $ — | $384,439 |
The carrying amount of the liability
for collateral for securities loaned at August 31, 2022 approximated its fair value. If measured at fair value, such liability would have been considered as Level 2 in the fair value hierarchy (see Note 11) at August 31, 2022.
10 Investments in Affiliated Funds
At August 31, 2022, the value of the Fund's investment in
affiliated funds was $882,652, which represents 1.0% of the Fund's net assets. Transactions in affiliated funds by the Fund for the six months ended August 31, 2022 were as follows:
| Name | Value,
beginning of period |
Purchases | Sales
proceeds |
Net
realized gain (loss) |
Change
in unrealized appreciation (depreciation) |
Value,
end of period |
Dividend
income |
Units/Shares,
end of period |
| Short-Term Investments | ||||||||
| Cash Reserves Fund | $327,783 | $15,693,475 | $(16,021,255) | $ (17) | $ 14 | $ — | $ 72 | — |
| Liquidity Fund | — | 44,118,340 | (43,235,688) | — | — | 882,652 | 6,766 | 882,652 |
| Total | $ (17) | $ 14 | $882,652 | $6,838 | ||||
11 Fair Value Measurements
Under generally accepted accounting principles for fair value
measurements, a three-tier hierarchy to prioritize the assumptions, referred to as inputs, is used in valuation techniques to measure fair value. The three-tier hierarchy of inputs is summarized in the three broad levels listed below.
| • | Level 1 – quoted prices in active markets for identical investments |
| • | Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.) |
| • | Level 3 – significant unobservable inputs (including a fund's own assumptions in determining the fair value of investments) |
In cases where the inputs used to measure fair value fall in
different levels of the fair value hierarchy, the level disclosed is determined based on the lowest level input that is significant to the fair value measurement in its entirety. The inputs or methodology used for valuing securities are not
necessarily an indication of the risk associated with investing in those securities.
At August 31, 2022, 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 | $ 89,379,583* | $ — | $ — | $ 89,379,583 |
| Short-Term Investments: | ||||
| Affiliated Fund | 882,652 | — | — | 882,652 |
| Securities Lending Collateral | 384,439 | — | — | 384,439 |
| Total Investments | $90,646,674 | $ — | $ — | $90,646,674 |
| * | The level classification by major category of investments is the same as the category presentation in the Portfolio of Investments. |
19
Parametric
Dividend Income Fund
August 31, 2022
Notes to Financial
Statements (Unaudited) — continued
12 Risks and Uncertainties
Pandemic Risk
An outbreak of respiratory disease caused by a novel
coronavirus was first detected in China in late 2019 and subsequently spread internationally. This coronavirus has resulted in closing borders, enhanced health screenings, changes to healthcare service preparation and delivery, quarantines,
cancellations, disruptions to supply chains and customer activity, as well as general concern and uncertainty. Health crises caused by outbreaks of disease, such as the coronavirus outbreak, may exacerbate other pre-existing political, social and
economic risks and disrupt normal market conditions and operations. The impact of this outbreak has negatively affected the worldwide economy, as well as the economies of individual countries and industries, and could continue to affect the market
in significant and unforeseen ways. Other epidemics and pandemics that may arise in the future may have similar effects. Any such impact could adversely affect the Fund's performance, or the performance of the securities in which the Fund
invests.
20
Parametric
Dividend Income Fund
August 31, 2022
Board of
Trustees’ Contract Approval
Overview of the Contract Review Process
The Investment Company Act of 1940, as amended (the “1940
Act”), provides, in substance, that the investment advisory agreement between a fund and its investment adviser will continue in effect from year-to-year only if its continuation is approved on an annual basis by a vote of the fund’s
board of trustees, including a majority of the trustees who are not “interested persons” of the fund (“independent trustees”), cast in person at a meeting called for the purpose of considering such approval.
At a meeting held on June 8, 2022, the Boards of
Trustees/Directors (collectively, the “Board”) that oversee the registered investment companies advised by Eaton Vance Management or its affiliate, Boston Management and Research (the “Eaton Vance Funds”), including a
majority of the independent trustees (the “Independent Trustees”), voted to approve the continuation of existing investment advisory agreements and sub-advisory
agreements1 for each of the Eaton Vance Funds for an additional one-year period. The Board relied upon the affirmative recommendation of its Contract Review
Committee, which is a committee exclusively comprised of Independent Trustees. Prior to making its recommendation, the Contract Review Committee reviewed information furnished by the adviser and sub-adviser to each of the Eaton Vance Funds
(including information specifically requested by the Board) for a series of formal meetings held between April and June 2022. Members of the Contract Review Committee also considered information received at prior meetings of the Board and its
committees, to the extent such information was relevant to the Contract Review Committee’s annual evaluation of the investment advisory agreements and sub-advisory agreements.
In connection with its evaluation of the investment advisory
agreements and sub-advisory agreements, the Board considered various information relating to the Eaton Vance Funds. This included information applicable to all or groups of Eaton Vance Funds, which is referenced immediately below, and information
applicable to the particular Eaton Vance Fund covered by this report (additional fund-specific information is referenced below under “Results of the Contract Review Process”). (For funds that invest through one or more underlying
portfolios, references to “each fund” in this section may include information that was considered at the portfolio-level.)
Information about Fees, Performance and Expenses
• A report from an independent
data provider comparing advisory and other fees paid by each fund to such fees paid by comparable funds, as identified by the independent data provider (“comparable funds”);
• A report from an independent
data provider comparing each fund’s total expense ratio (and its components) to those of comparable funds;
• A report from an independent
data provider comparing the investment performance of each fund (including, as relevant, total return data, income data, Sharpe ratios and information ratios) to the investment performance of comparable funds and, as applicable, benchmark indices,
over various time periods;
• In certain instances, data
regarding investment performance relative to customized groups of peer funds and blended indices identified by the adviser in consultation with the Portfolio Management Committee of the Board (a committee exclusively comprised of Independent
Trustees);
• Comparative
information concerning the fees charged and services provided by the adviser and sub-adviser to each fund in managing other accounts (which may include other mutual funds, collective investment funds and institutional accounts) using investment
strategies and techniques similar to those used in managing such fund(s), if any;
• Profitability analyses with
respect to the adviser and sub-adviser to each of the funds;
Information about Portfolio Management and Trading
• Descriptions of the investment
management services provided to each fund, as well as each of the funds’ investment strategies and policies;
• The procedures and processes
used to determine the value of fund assets, including, when necessary, the determination of “fair value” and actions taken to monitor and test the effectiveness of such procedures and processes;
• Information about the policies
and practices of each fund’s adviser and sub-adviser with respect to trading, including their processes for seeking best execution of portfolio transactions;
• Information about the
allocation of brokerage transactions and the benefits, if any, received by the adviser and sub-adviser to each fund as a result of brokerage allocation, including, as applicable, information concerning the acquisition of research through client
commission arrangements and policies with respect to “soft dollars”;
• Data relating to the portfolio
turnover rate of each fund and related information regarding active management in the context of particular strategies;
Information about each Adviser and Sub-adviser
• Reports detailing the
financial results and condition of the adviser and sub-adviser to each fund;
• Information regarding the
individual investment professionals whose responsibilities include portfolio management and investment research for the funds, and, for portfolio managers and certain other investment professionals, information relating to their responsibilities
with respect to managing other mutual funds and investment accounts, as applicable;
1 Not all Eaton Vance Funds have entered into a sub-advisory agreement with a sub-adviser. Accordingly,
references to “sub-adviser” or “sub-advisory agreement” in this “Overview” section may not be applicable to the particular Eaton Vance Fund covered by this report. Following the “Overview” section,
further information regarding the Board’s evaluation of a fund’s contractual arrangements is included under the “Results of the Contract Review Process” section.
21
Parametric
Dividend Income Fund
August 31, 2022
Board of
Trustees’ Contract Approval — continued
• Information regarding the
adviser’s and its parent company’s (Morgan Stanley’s) efforts to retain and attract talented investment professionals, including in the context of a particularly competitive marketplace for talent, as well as the ongoing unique
environment presented by hybrid, remote and other alternative work arrangements;
• The Code of Ethics of the
adviser and its affiliates and the sub-adviser of each fund, together with information relating to compliance with, and the administration of, such codes;
• Policies and procedures
relating to proxy voting, including regular reporting with respect to fund proxy voting activities;
• Information regarding the
handling of corporate actions and class actions, as well as information regarding litigation and other regulatory matters;
• Information concerning the
resources devoted to compliance efforts undertaken by the adviser and its affiliates and the sub-adviser of each fund, if any, including descriptions of their various compliance programs and their record of compliance;
• Information concerning the
business continuity and disaster recovery plans of the adviser and its affiliates and the sub-adviser of each fund, if any;
• A description of Eaton Vance
Management’s and Boston Management and Research’s oversight of sub-advisers, including with respect to regulatory and compliance issues, investment management and other matters;
Other Relevant Information
• Information regarding
ongoing initiatives to further integrate and harmonize, where applicable, the investment management and other departments of the adviser and its affiliates with the overall investment management infrastructure of Morgan Stanley, in light of Morgan
Stanley’s acquisition of Eaton Vance on March 1, 2021;
• Information concerning the
nature, cost and character of the administrative and other non-investment advisory services provided by Eaton Vance Management and its affiliates;
• Information concerning
oversight of the relationship with the custodian, subcustodians, fund accountants, and other third-party service providers by the adviser and/or administrator to each of the funds;
• Information concerning efforts
to implement policies and procedures with respect to various new regulations applicable to the funds, including Rule 12d1-4 (the Fund-of-Funds Rule), Rule 18f-4 (the Derivatives Rule) and Rule 2a-5 (the Fair Valuation Rule);
• For an Eaton Vance Fund
structured as an exchange-listed closed-end fund, information concerning the benefits of the closed-end fund structure, as well as, where relevant, the closed-end fund’s market prices (including as compared to the closed-end fund’s net
asset value (NAV)), trading volume data, continued use of auction preferred shares (where applicable), distribution rates and other relevant matters;
• The risks which the adviser
and/or its affiliates incur in connection with the management and operation of the funds, including, among others, litigation, regulatory, entrepreneurial, and other business risks (and the associated costs of such risks); and
• The terms of each investment
advisory agreement and sub-advisory agreement.
During the
various meetings of the Board and its committees over the course of the year leading up to the June 8, 2022 meeting, the Trustees received information from portfolio managers and other investment professionals of the advisers and sub-advisers of the
funds regarding investment and performance matters, and considered various investment and trading strategies used in pursuing the funds’ investment objectives. The Trustees also received information regarding risk management techniques
employed in connection with the management of the funds. The Board and its committees evaluated issues pertaining to industry and regulatory developments, compliance procedures, fund governance and other issues with respect to the funds, and
received and participated in reports and presentations provided by Eaton Vance Management, Boston Management and Research and fund sub-advisers, with respect to such matters. In addition to the formal meetings of the Board and its committees, the
Independent Trustees held regular teleconferences to discuss, among other topics, matters relating to the continuation of investment advisory agreements and sub-advisory agreements.
The Contract Review Committee was advised throughout the
contract review process by Goodwin Procter LLP, independent legal counsel for the Independent Trustees. The members of the Contract Review Committee, with the advice of such counsel, exercised their own business judgment in determining the material
factors to be considered in evaluating each investment advisory agreement and sub-advisory agreement and the weight to be given to each such factor. The conclusions reached with respect to each investment advisory agreement and sub-advisory
agreement were based on a comprehensive evaluation of all the information provided and not any single factor. Moreover, each member of the Contract Review Committee may have placed varying emphasis on particular factors in reaching conclusions with
respect to each investment advisory agreement and sub-advisory agreement. In evaluating each investment advisory agreement and sub-advisory agreement, including the fee structures and other terms contained in such agreements, the members of the
Contract Review Committee were also informed by multiple years of analysis and discussion with the adviser and sub-adviser to each of the Eaton Vance Funds.
Results of the Contract Review Process
Based on its consideration of the foregoing, and such other
information it deemed relevant, including the factors and conclusions described below, the Contract Review Committee concluded that the continuation of the investment advisory and administrative agreement between Parametric Dividend Income Fund (the
“Fund”) and Eaton Vance Management (the “Adviser”) and the sub-advisory agreement between the Adviser and Parametric Portfolio Associates LLC (the “Sub-adviser”), an affiliate of the Adviser, with respect to the
Fund, including their respective fee structures, are in the interests of shareholders and, therefore, recommended to the Board approval of each agreement. Based on the recommendation of the Contract Review Committee, the Board, including a majority
of the Independent Trustees, voted to approve continuation of the investment advisory and administrative agreement and the sub-advisory agreement for the Fund.
22
Parametric
Dividend Income Fund
August 31, 2022
Board of
Trustees’ Contract Approval — continued
Nature, Extent and Quality of Services
In considering whether to approve the investment advisory and
administrative agreement and the sub-advisory agreement for 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 processes in light of the types of investments held by the Fund, including the education, experience and number of investment professionals and other personnel who provide portfolio
management, investment research, and similar services to the Fund. Regarding the Adviser, the Board considered the Adviser’s responsibilities with respect to oversight of 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, the compensation methods of the Adviser and other factors, including
the reputation and resources of the Adviser to recruit and retain highly qualified research, advisory and supervisory investment professionals. In addition, the Board considered the time and attention devoted to the Eaton Vance Funds, including the
Fund, by senior management, as well as the infrastructure, operational capabilities and support staff in place to assist in the portfolio management and operations of the Fund, including the provision of administrative services. The Board also
considered the business-related and other risks to which the Adviser or its affiliates may be subject in managing the Fund.
The Board considered the compliance programs of the Adviser and
relevant affiliates thereof, including the Sub-adviser. The Board considered compliance and reporting matters regarding, among other things, personal trading by investment professionals, disclosure of portfolio holdings, late trading, frequent
trading, portfolio valuation, business continuity and the allocation of investment opportunities. The Board also considered the responses of the Adviser and its affiliates to requests in recent years from regulatory authorities, such as the
Securities and Exchange Commission and the Financial Industry Regulatory Authority.
The Board considered other administrative services provided or
overseen by Eaton Vance Management and its affiliates, including transfer agency and accounting services. The Board evaluated the benefits to shareholders of investing in a fund that is a part of a large fund complex offering exposure to a variety
of asset classes and investment disciplines, as well as the ability, in many cases, to exchange an investment among different funds without incurring additional sales charges.
After consideration of the foregoing factors, among others, the
Board concluded that the nature, extent and quality of services provided by the Adviser and the Sub-adviser, taken as a whole, are appropriate and consistent with the terms of the 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 identified by an independent data provider (the peer group), as well as an appropriate benchmark index. The Board’s review included comparative performance data with respect to the Fund for the one-, three- and
five-year periods ended December 31, 2021. In this regard, the Board noted that the performance of the Fund was lower than the median performance of the Fund’s peer group for the three-year period. The Board also noted that the performance of
the Fund was lower than its benchmark index for the three-year period. On the basis of the foregoing, the performance of the Fund over other periods, and other relevant information provided by the Adviser in response to inquiries from the Contract
Review Committee, the Board concluded that the performance of the Fund was satisfactory.
Management Fees and Expenses
The Board considered contractual fee rates payable by the Fund
for advisory and administrative services (referred to collectively as “management fees”). As part of its review, the Board considered the Fund’s management fees and total expense ratio for the one-year period ended December 31,
2021, as compared to those of comparable funds, before and after giving effect to any undertaking to waive fees or reimburse expenses. The Board also received and considered information about the services offered and the fee rates charged by the
Adviser and/or Sub-adviser to other types of accounts with investment objectives and strategies that are substantially similar to and/or managed in a similar investment style as the Fund. In this regard, the Board received information about the
differences in the nature and scope of services the Adviser and/or Sub-adviser provide to the Fund as compared to other types of accounts and the material differences in compliance, reporting and other legal burdens and risks to the Adviser and/or
Sub-adviser as between the Fund and other types of accounts. The Board also considered factors that had an impact on the Fund’s total expense ratio relative to comparable funds.
After considering the foregoing information, and in light of
the nature, extent and quality of the services provided by the Adviser and the Sub-adviser, the Board concluded that the management fees charged for advisory and related services are reasonable.
Profitability and “Fall-Out” Benefits
The Board considered the level of profits realized by the
Adviser and relevant affiliates thereof, 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 or other services.
23
Parametric
Dividend Income Fund
August 31, 2022
Board of
Trustees’ Contract Approval — continued
The
Board concluded that, in light of the foregoing factors and the nature, extent and quality of the services rendered, the profits realized by the Adviser and its affiliates, including the Sub-adviser, are deemed not to be excessive.
The Board also considered direct or indirect fall-out benefits
received by the Adviser and its affiliates, including the Sub-adviser, in connection with their respective 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.
Economies of Scale
In reviewing management fees and profitability, the Board also
considered the extent to which the Adviser and its affiliates, on the one hand, and the Fund, on the other hand, can expect to realize benefits from economies of scale as the assets of the Fund increase. The Board acknowledged the difficulty in
accurately measuring the benefits resulting from economies of scale, if any, with respect to the management of any specific fund or group of funds. The Board reviewed data summarizing the increases and decreases in the assets of the Fund and of all
Eaton Vance Funds as a group over various time periods, and evaluated the extent to which the total expense ratio of the Fund and the profitability of the Adviser and its affiliates may have been affected by such increases or decreases. Based upon
the foregoing, the Board concluded that the Fund currently shares in the benefits from economies of scale, if any, when they are realized by the Adviser. The Board also concluded that the structure of the advisory fee, which includes breakpoints at
several asset levels, will allow the Fund to continue to benefit from any economies of scale in the future.
24
Parametric
Dividend Income Fund
August 31, 2022
Liquidity Risk
Management Program
The Fund has implemented a written liquidity risk
management program (Program) and related procedures to manage its liquidity in accordance with Rule 22e-4 under the Investment Company Act of 1940, as amended (Liquidity Rule). The Liquidity Rule defines “liquidity risk” as the risk that
a fund could not meet requests to redeem shares issued by the fund without significant dilution of the remaining investors’ interests in the fund. The Fund’s Board of Trustees/Directors has designated the investment adviser to serve
as the administrator of the Program and the related procedures. The administrator has established a Liquidity Risk Management Oversight Committee (Committee) to perform the functions necessary to administer the Program. As part of the Program, the
administrator is responsible for identifying illiquid investments and categorizing the relative liquidity of the Fund’s investments in accordance with the Liquidity Rule. Under the Program, the administrator assesses, manages, and
periodically reviews the Fund’s liquidity risk, and is responsible for making certain reports to the Fund’s Board of Trustees/Directors and the Securities and Exchange Commission (SEC) regarding the liquidity of the Fund’s
investments, and to notify the Board of Trustees/Directors and the SEC of certain liquidity events specified in the Liquidity Rule. The liquidity of the Fund’s portfolio investments is determined based on a number of factors including, but not
limited to, relevant market, trading and investment-specific considerations under the Program.
At a meeting of the Fund’s Board of Trustees/Directors on
June 7, 2022, the Committee provided a written report to the Fund’s Board of Trustees/Directors pertaining to the operation, adequacy, and effectiveness of implementation of the Program, as well as the operation of the highly liquid investment
minimum (if applicable) for the period January 1, 2021 through December 31, 2021 (Review Period). The Program operated effectively during the Review Period, supporting the administrator’s ability to assess, manage and monitor Fund liquidity
risk, including during periods of market volatility and net redemptions. During the Review Period, the Fund met redemption requests on a timely basis.
There can be no assurance that the Program will achieve its
objectives in the future. Please refer to the Fund’s prospectus for more information regarding the Fund’s exposure to liquidity risk and other principal risks to which an investment in the Fund may be subject.
25
Parametric
Dividend Income Fund
August 31, 2022
Officers and
Trustees
| Officers | |
| Eric
A. Stein President |
Jill R.
Damon Secretary |
| Deidre
E. Walsh Vice President and Chief Legal Officer |
Richard F.
Froio Chief Compliance Officer |
| James
F. Kirchner Treasurer |
|
| Trustees |
| * | Interested Trustee |
| ** | Mr. Bowser and Ms. Wiser began serving as Trustees effective April 4, 2022. |
26
Eaton Vance Funds
| Privacy Notice | April 2021 |
| FACTS | WHAT
DOES EATON VANCE DO WITH YOUR PERSONAL INFORMATION? |
| Why? | Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do. |
| What? | The
types of personal information we collect and share depend on the product or service you have with us. This information can include:■ Social Security number and income ■ investment experience and risk tolerance ■ checking account number and wire transfer instructions |
| How? | All financial companies need to share customers’ personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers’ personal information; the reasons Eaton Vance chooses to share; and whether you can limit this sharing. |
| Reasons
we can share your personal information |
Does
Eaton Vance share? |
Can
you limit this sharing? |
| For our everyday business purposes — such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus | Yes | No |
| For our marketing purposes — to offer our products and services to you | Yes | No |
| For joint marketing with other financial companies | No | We don’t share |
| For our investment management affiliates’ everyday business purposes — information about your transactions, experiences, and creditworthiness | Yes | Yes |
| For our affiliates’ everyday business purposes — information about your transactions and experiences | Yes | No |
| For our affiliates’ everyday business purposes — information about your creditworthiness | No | We don’t share |
| For our investment management affiliates to market to you | Yes | Yes |
| For our affiliates to market to you | No | We don’t share |
| For nonaffiliates to market to you | No | We don’t share |
| To
limit our sharing |
Call toll-free 1-800-262-1122 or email: EVPrivacy@eatonvance.comPlease note:If you are a new customer, we can begin sharing your information 30 days from the date we sent this notice. When you are no longer our customer, we continue to share your information as described in this notice. However, you can contact us at any time to limit our sharing. |
| Questions? | Call toll-free 1-800-262-1122 or email: EVPrivacy@eatonvance.com |
27
Eaton Vance Funds
| Privacy Notice — continued | April 2021 |
Page 2
| Who we are | |
| Who is providing this notice? | Eaton Vance Management, Eaton Vance Distributors, Inc., Eaton Vance Trust Company, Eaton Vance Management (International) Limited, Eaton Vance Advisers International Ltd., Eaton Vance Global Advisors Limited, Eaton Vance Management’s Real Estate Investment Group, Boston Management and Research, Calvert Research and Management, Eaton Vance and Calvert Fund Families and our investment advisory affiliates (“Eaton Vance”) (see Investment Management Affiliates definition below) |
| What we do | |
| How
does Eaton Vance protect my personal information? |
To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings. We have policies governing the proper handling of customer information by personnel and requiring third parties that provide support to adhere to appropriate security standards with respect to such information. |
| How
does Eaton Vance collect my personal information? |
We
collect your personal information, for example, when you■ open an account or make deposits or withdrawals from your account ■ buy securities from us or make a wire transfer ■ give us your contact informationWe also collect your personal information from others, such as credit bureaus, affiliates, or other companies. |
| Why can’t I limit all sharing? | Federal
law gives you the right to limit only■ sharing for affiliates’ everyday business purposes — information about your creditworthiness ■ affiliates from using your information to market to you ■ sharing for nonaffiliates to market to youState laws and individual companies may give you additional rights to limit sharing. See below for more on your rights under state law. |
| Definitions | |
| Investment
Management Affiliates |
Eaton Vance Investment Management Affiliates include registered investment advisers, registered broker- dealers, and registered and unregistered funds. Investment Management Affiliates does not include entities associated with Morgan Stanley Wealth Management, such as Morgan Stanley Smith Barney LLC and Morgan Stanley & Co. |
| Affiliates | Companies related by common ownership or control. They can be financial and nonfinancial companies.■ Our affiliates include companies with a Morgan Stanley name and financial companies such as Morgan Stanley Smith Barney LLC and Morgan Stanley & Co. |
| Nonaffiliates | Companies not related by common ownership or control. They can be financial and nonfinancial companies.■ Eaton Vance does not share with nonaffiliates so they can market to you. |
| Joint marketing | A formal agreement between nonaffiliated financial companies that together market financial products or services to you.■ Eaton Vance doesn’t jointly market. |
| Other important information | |
| Vermont: Except as permitted by law, we will not share personal information we collect about Vermont residents with Nonaffiliates unless you provide us with your written consent to share such information.California: Except as permitted by law, we will not share personal information we collect about California residents with Nonaffiliates and we will limit sharing such personal information with our Affiliates to comply with California privacy laws that apply to us. | |
28
Eaton Vance Funds
IMPORTANT NOTICES
Delivery of Shareholder Documents. The Securities and Exchange Commission (SEC) permits funds to deliver only one copy of shareholder documents, including prospectuses, proxy statements and
shareholder reports, to fund investors with multiple accounts at the same residential or post office box address. This practice is often called “householding” and it helps eliminate duplicate mailings to shareholders. Eaton Vance, or your financial intermediary, may household the mailing of your documents indefinitely unless you instruct Eaton Vance, or your financial intermediary, otherwise. If you would prefer that your Eaton Vance documents not be householded, please contact Eaton Vance at 1-800-260-0761, or contact your financial intermediary. Your instructions that householding not apply
to delivery of your Eaton Vance documents will typically be effective within 30 days of receipt by Eaton Vance or your financial intermediary.
Portfolio
Holdings. Each Eaton Vance Fund and its underlying Portfolio(s) (if applicable) files a schedule of portfolio holdings on Part F to Form N-PORT with the
SEC. Certain information filed on Form N-PORT may be viewed on the Eaton Vance website at www.eatonvance.com, by calling Eaton Vance at 1-800-260-0761 or in the EDGAR database on the SEC’s website at www.sec.gov.
Proxy
Voting. From time to time, funds are required to vote proxies related to the securities held by the funds. The Eaton Vance Funds or their underlying
Portfolios (if applicable) vote proxies according to a set of policies and procedures approved by the Funds’ and Portfolios’ Boards. You may obtain a description of these policies and procedures and information on how the Funds or
Portfolios voted proxies relating to portfolio securities during the most recent 12-month period ended June 30, without charge, upon request, by calling 1-800-260-0761 and by accessing the SEC’s website at www.sec.gov.
29
* 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.
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 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/ Eric A. Stein | |
| Eric A. Stein | ||
| President | ||
| Date: | October 25, 2022 | |
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 25, 2022 | |
| By: | /s/ Eric A. Stein | |
| Eric A. Stein | ||
| President | ||
| Date: | October 25, 2022 | |