Eaton Vance Tax-Advantaged Dividend Income Funds Announce Changes In Investment Policies
BOSTON, Oct. 23, 2015 /PRNewswire/ -- Eaton Vance Tax-Advantaged Dividend Income Fund (NYSE: EVT), Eaton Vance Tax-Advantaged Global Dividend Income Fund (NYSE: ETG) and Eaton Vance Tax-Advantaged Global Dividend Opportunities Fund (NYSE: ETO), each a diversified closed-end investment company, (each, a "Fund" and, together, the "Funds") have modified their policies relating to use of derivatives, and Eaton Vance Tax-Advantaged Global Dividend Income Fund and Eaton Vance Tax-Advantaged Global Dividend Opportunities Fund (together, the "Global Funds") have modified their policy relating to investing in securities of non-U.S. issuers.
Each Fund seeks a high level of after-tax total return and invests primarily in dividend-paying common and preferred stocks. In seeking its objective, each Fund may engage in dividend capture trading. In a dividend capture trade, a Fund buys a stock prior to its ex-dividend date and sells the stock on or after the ex-dividend date. Dividend capture trading can result in a Fund having more or less exposure to individual sectors and/or markets than would otherwise apply. Each Fund has modified its investment policies to permit broader use of derivatives, principally seeking to manage exposure to certain sectors and/or markets in connection with its use of dividend capture trading. Each Fund expects primarily to buy and sell equity index futures contracts for this purpose, but may also engage in other types of derivatives to manage such exposures. Each Fund may also use derivatives for other purposes, such as hedging, to enhance return or as a substitute for the purchase or sale of securities or currencies. Other permitted derivatives include futures contracts on securities and non-equity indices, options on futures contracts, the purchase of put options and the sale of call options on securities held, equity swaps, interest rate swaps, covered short sales, forward sales of stocks, forward currency exchange contracts and currency futures contracts. Each Fund may invest in the foregoing derivatives without limitation and use of derivatives may be extensive. Previously, ETO's investment in the above-described derivatives was limited to 20% of its total assets and neither Global Fund was permitted to invest more than 10% of total assets in such derivatives for non-hedging purposes. Each Fund may also invest in credit derivatives (credit default swaps, total return swaps, credit options and other derivative transactions with substantially similar characteristics and risks), provided that the notional value of such derivative instruments entered into for non-hedging purposes does not exceed 5% of the value of preferred stocks held by the Fund.
Under normal market conditions, each Global Fund currently invests at least 25% of its total managed assets in securities of U.S. issuers and at least 35% of its total managed assets in securities of non-U.S. issuers. Each Global Fund also normally invests in issuers located in at least three countries including the United States. Pursuant to the revised policy, under normal market conditions, each Global Fund will invest (i) at least 25% of its total managed assets in the securities of U.S. issuers; (ii) at least 30% of its total managed assets in securities of non-U.S. issuers, including issuers located in emerging market countries; and (iii) in issuers located in at least five different countries (including the United States). Issuers will be considered to be located outside the United States if domiciled in and tied economically to one or more non-U.S. countries, irrespective of whether their securities trade in the U.S.
The Funds are managed by Eaton Vance Management, a subsidiary of Eaton Vance Corp. (NYSE: EV). Based in Boston, Eaton Vance is one of the oldest investment management firms in the United States, with a history dating back to 1924. Eaton Vance and its affiliates managed $298.9 billion in assets as of September 30, 2015, offering individuals and institutions a broad array of investment strategies and wealth management solutions. For more information about Eaton Vance, visit www.eatonvance.com.
Fund performance is sensitive to stock market volatility. Changes in the dividend policies of companies could make it difficult to provide a predictable level of income. Investments in foreign instruments or currencies can involve greater risk and volatility than U.S. investments because of adverse market, economic, political, regulatory, geopolitical or other conditions. Dividend capture strategies may result in higher portfolio turnover, increased trading costs and potential for capital loss or gains. When interest rates rise, the value of preferred securities will generally decline. Derivative instruments can be highly volatile, result in economic leverage (which can magnify losses), and involve risks in addition to the risks of the underlying instrument on which the derivative is based, such as counterparty, correlation and liquidity risk. If a counterparty is unable to honor its commitments, the net asset value of Fund shares may decline and/or the Fund could experience delays in the return of collateral or other assets held by the counterparty.
The information contained herein is provided for informational purposes only and does not constitute a solicitation of an offer to buy or sell Fund shares. Fund shares are only available for purchase and sale at current market prices on an exchange. There is no assurance that a Fund will achieve its investment objective. Shares of closed-end funds often trade at a discount from their net asset value. The Funds are not complete investment programs and you may lose money investing therein. An investment in a Fund may not be appropriate for all investors. Investors should review and consider carefully a Fund's investment objective, risks, charges and expenses.
SOURCE Eaton Vance Management
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