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As Of Filer Filing For·On·As Docs:Size Issuer Agent 11/25/14 Eaton Vance Growth Trust N-CSR 9/30/14 3:2.1M RR Donnelley/FA → Eaton Vance Atlanta Capital Focused Growth Fund ⇒ 3 Classes/Contracts → Eaton Vance Atlanta Capital Select Equity Fund ⇒ 3 Classes/Contracts → Eaton Vance Atlanta Capital SMID-Cap Fund ⇒ 5 Classes/Contracts |
Document/Exhibit Description Pages Size 1: N-CSR Eaton Vance Growth Trust HTML 1.31M 3: EX-99.906CERT EX-99.906CERT Section 906 Certification HTML 6K 2: EX-99.CERT EX-99.CERT Section 302 Certification HTML 12K
Eaton Vance Growth 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: 811-01241
Eaton Vance Growth 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)
September 30
Date of Fiscal Year End
Date of Reporting Period
Item 1. Reports to Stockholders
Eaton Vance
Atlanta Capital SMID-Cap Fund
Annual Report
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 1-800-262-1122.
Annual Report September 30, 2014
Eaton Vance
Atlanta Capital SMID-Cap Fund
Management’s Discussion of Fund Performance |
2 | |||
Performance |
3 | |||
Fund Profile |
4 | |||
Endnotes and Additional Disclosures |
5 | |||
Fund Expenses |
6 | |||
Financial Statements |
7 | |||
Report of Independent Registered Public Accounting Firm |
19 and 30 | |||
Federal Tax Information |
20 | |||
Special Meeting of Shareholders |
31 | |||
Board of Trustees’ Contract Approval |
32 | |||
Management and Organization |
35 | |||
Important Notices |
38 |
Eaton Vance
Atlanta Capital SMID-Cap Fund
Management’s Discussion of Fund Performance1
Economic and Market Conditions
U.S. stocks delivered solid gains for the 12-month period ended September 30, 2014. Beginning in the second half of October 2013, the market turned upward after a federal budget agreement ended the 16-day U.S. government shutdown. In December, when the U.S. Federal Reserve (the Fed) made its long-anticipated move to begin “tapering” economic stimulus, U.S. stocks put aside earlier fears of tapering and soared to record highs.
Harsh winter weather and geopolitical tensions weighed on the market in early 2014, but U.S. stocks subsequently resumed their advance amid signs of a gradually strengthening economy. The U.S. equity market generally climbed at a moderate pace through the spring of 2014, until the outbreak of hostilities in Iraq in June sent stocks sharply lower. But equities soon bounced back once the Fed reiterated its pledge to maintain low interest rates. U.S. stocks seesawed throughout the third quarter of 2014, falling in late July amid mounting geopolitical and economic concerns, before rebounding in August and into September, only to struggle again in the final couple weeks of the 12-month period.
However, the major U.S. stock indexes ended the 12-month period with strong performance. The S&P 500 Index2 advanced 19.73% for the period, while the Dow Jones Industrial Average gained 15.29%. The technology-laden NASDAQ Composite Index added 20.61%. Large-cap U.S. stocks (as measured by the Russell 1000 Index) generally fared better than their small-cap counterparts (as measured by the Russell 2000 Index) for the 12-month period. Within the large-cap space, growth stocks generally outpaced value stocks, while the reverse was true in the small-cap category.
Fund Performance
For the 12-month period ended September 30, 2014, Eaton Vance Atlanta Capital SMID-Cap Fund (the Fund) had a total return of 6.13% for Class A shares at net asset value (NAV). By comparison, the Fund’s primary benchmark, the Russell 2500 Index (the Index), returned 8.97% for the same period.
The Fund underperformed the Index due to both stock selection and sector allocation. Of the 10 economic sectors in the Index, the Fund delivered positive returns in six of the eight sectors in which it was invested. The Index recorded positive returns in all 10 sectors.
Consumer discretionary was the Fund’s worst-performing sector versus the Index, as a result of both stock selection and an overweight position. In the distributors industry, LKQ Corp., a leading aftermarket auto parts supplier, was the Fund’s worst-performing individual stock amid concern about the potential effect of collision avoidance technology on its business. The Fund’s sole holding in the media industry, investment research provider Morningstar, Inc., was also among the Fund’s weakest-performing individual stocks. Stock selection in the health care sector further hampered Fund performance relative to the Index, but was partially offset by a beneficial overweight position in the sector. Within health care, the Fund’s lack of exposure to the pharmaceuticals industry detracted from relative performance, as pharmaceuticals outperformed for the 12-month period. In the life sciences tools & services industry, diagnostic products company Bio-Rad Laboratories was one of Fund’s poorest-performing individual stocks after the company reported disappointing earnings. Within the energy sector, stock selection detracted from the Fund’s performance versus the Index. The Fund’s two holdings in the sector, Oceaneering International, Inc. and Dril-Quip, Inc., both suppliers to the ocean oil and gas drilling business, were among the Fund’s worst-performing individual stocks. Both stocks were hurt by a decline in the ocean drilling business during the period.
On the positive side, industrials was the Fund’s best-performing sector relative to the Index, as a result of stock selection. Specifically, the Fund’s holdings in the marine and electrical equipment industries outperformed versus the Index. In the marine industry, the Fund’s overweight position in tank-barge operator Kirby Corp. boosted performance relative to the Index, as the stock gained amid rising U.S. oil production. The financials sector also contributed to the Fund’s relative performance. In the insurance industry, specialty commercial insurance provider Markel Corp. was one of the Fund’s best-performing individual stocks after the company reported strong earnings. Stock selection in the consumer staples sector also aided Fund performance versus the Index, particularly the Fund’s lack of exposure to the underperforming personal products industry.
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 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 |
Eaton Vance
Atlanta Capital SMID-Cap Fund
Performance2,3
Portfolio Managers Charles B. Reed, CFA, William O. Bell IV, CFA and W. Matthew Hereford, CFA, each of Atlanta Capital Management Company, LLC.
% Average Annual Total Returns | Class Inception Date |
Performance Inception Date |
One Year | Five Years | Ten Years | |||||||||||||||
Class A at NAV |
11/28/2003 | 04/30/2002 | 6.13 | % | 15.36 | % | 11.38 | % | ||||||||||||
Class A with 5.75% Maximum Sales Charge |
— | — | 0.04 | 14.00 | 10.72 | |||||||||||||||
Class C at NAV |
10/01/2009 | 04/30/2002 | 5.35 | 14.50 | 10.96 | |||||||||||||||
Class C with 1% Maximum Sales Charge |
— | — | 4.35 | 14.50 | 10.96 | |||||||||||||||
Class I at NAV |
04/30/2002 | 04/30/2002 | 6.42 | 15.64 | 11.65 | |||||||||||||||
Class R at NAV |
08/03/2009 | 04/30/2002 | 5.91 | 15.08 | 11.25 | |||||||||||||||
Class R6 at NAV |
07/01/2014 | 04/30/2002 | 6.46 | 15.65 | 11.65 | |||||||||||||||
Russell 2500 Index |
— | — | 8.97 | % | 15.98 | % | 9.45 | % | ||||||||||||
Russell 2000 Index |
— | — | 3.93 | 14.28 | 8.18 | |||||||||||||||
% Total Annual Operating Expense Ratios4 | Class A | Class C | Class I | Class R | Class R6 | |||||||||||||||
Gross |
1.26 | % | 2.01 | % | 1.01 | % | 1.51 | % | 0.93 | % | ||||||||||
Net |
1.25 | 2.00 | 1.00 | 1.50 | 0.92 |
Growth of $10,000
This graph shows the change in value of a hypothetical investment of $10,000 in Class A of the Fund for the period indicated. For comparison, the same investment is shown in the indicated index.
Growth of Investment | Amount Invested | Period Beginning | At NAV | With Maximum Sales Charge | ||||||||||||
Class C |
$ | 10,000 | 09/30/2004 | $ | 28,316 | N.A. | ||||||||||
Class I |
$ | 250,000 | 09/30/2004 | $ | 752,964 | N.A. | ||||||||||
Class R |
$ | 10,000 | 09/30/2004 | $ | 29,045 | N.A. | ||||||||||
Class R6 |
$ | 1,000,000 | 09/30/2004 | $ | 3,013,107 | N.A. |
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 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.
3 |
Eaton Vance
Atlanta Capital SMID-Cap Fund
Fund Profile5
Sector Allocation (% of net assets)6
Top 10 Holdings (% of net assets)6
Markel Corp. |
4.6 | % | ||
HCC Insurance Holdings, Inc. |
3.9 | |||
Kirby Corp. |
3.6 | |||
Morningstar, Inc. |
3.5 | |||
ANSYS, Inc. |
3.5 | |||
DENTSPLY International, Inc. |
3.1 | |||
Sally Beauty Holdings, Inc. |
3.1 | |||
Henry Schein, Inc. |
2.8 | |||
SEI Investments Co. |
2.7 | |||
City National Corp. |
2.6 | |||
Total |
33.4 | % |
See Endnotes and Additional Disclosures in this report.
4 |
Eaton Vance
Atlanta Capital SMID-Cap Fund
Endnotes and Additional Disclosures
1 | The views expressed in this report are those of the portfolio manager(s) and are current only through the date stated at the top of this page. These views are subject to change at any time based upon market or other conditions, and Eaton Vance and the Fund(s) disclaim any responsibility to update such views. These views may not be relied upon as investment advice and, because investment decisions are based on many factors, may not be relied upon as an indication of trading intent on behalf of any Eaton Vance fund. This commentary may contain statements that are not historical facts, referred to as “forward looking statements”. The Fund’s actual future results may differ significantly from those stated in any forward looking statement, depending on factors such as changes in securities or financial markets or general economic conditions, the volume of sales and purchases of Fund shares, the continuation of investment advisory, administrative and service contracts, and other risks discussed from time to time in the Fund’s filings with the Securities and Exchange Commission. |
2 | S&P 500 Index is an unmanaged index of large-cap stocks commonly used as a measure of U.S. stock market performance. Dow Jones Industrial Average is a price-weighted average of 30 blue-chip stocks that are generally the leaders in their industry. NASDAQ Composite Index is a market capitalization-weighted index of all domestic and international securities listed on NASDAQ. Russell 1000 Index is an unmanaged index of 1,000 U.S. large-cap stocks. Russell 2000 Index is an unmanaged index of 2,000 U.S. small-cap stocks. Russell 2500 Index is an unmanaged index of approximately 2,500 small- and midcap U.S. 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. |
3 | 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 prior to the inception date of a class may be linked to the performance of an older class of the Fund. This linked performance is adjusted for any applicable sales charge, but is not adjusted for class expense differences. If adjusted for such differences, the performance would be different. Performance presented in the financial highlights included in the financial statements is not linked. In the performance table, the performance of Class C and Class R is linked to Class A and the performance of Class R6 is linked to Class I. Performance since inception for an index, if presented, is the performance since the Fund’s or oldest share class’ inception, as applicable. |
4 | Source: Fund prospectus. Net expense ratio reflects a contractual expense reimbursement that continues through 1/31/15. Without the reimbursement, if applicable, performance would have been lower. |
5 | Fund invests in an affiliated investment company (Portfolio) with the same objective(s) and policies as the Fund. References to investments are to the Portfolio’s holdings. |
6 | Excludes cash and cash equivalents. |
Fund profile subject to change due to active management. |
5 |
Eaton Vance
Atlanta Capital SMID-Cap Fund
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 actual expense Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (April 1, 2014 – September 30, 2014) for Class A, Class C, Class I and Class R and (July 1, 2014 – September 30, 2014) for Class R6. The hypothetical expense Example is based on an investment of $1,000 invested for the one-half year period (April 1, 2014 – September 30, 2014).
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 (4/1/14) |
Ending Account Value (9/30/14) |
Expenses Paid During Period (4/1/14 – 9/30/14) |
Annualized Expense Ratio |
|||||||||||||
Actual* |
||||||||||||||||
Class A |
$ | 1,000.00 | $ | 990.70 | $ | 6.14 | 1.23 | % | ||||||||
Class C |
$ | 1,000.00 | $ | 987.20 | $ | 9.86 | 1.98 | % | ||||||||
Class I |
$ | 1,000.00 | $ | 992.20 | $ | 4.89 | 0.98 | % | ||||||||
Class R |
$ | 1,000.00 | $ | 990.10 | $ | 7.38 | 1.48 | % | ||||||||
Class R6 |
$ | 1,000.00 | $ | 961.30 | $ | 2.22 | 0.90 | % | ||||||||
Hypothetical** |
||||||||||||||||
(5% return per year before expenses) |
||||||||||||||||
Class A |
$ | 1,000.00 | $ | 1,018.90 | $ | 6.23 | 1.23 | % | ||||||||
Class C |
$ | 1,000.00 | $ | 1,015.10 | $ | 10.00 | 1.98 | % | ||||||||
Class I |
$ | 1,000.00 | $ | 1,020.20 | $ | 4.96 | 0.98 | % | ||||||||
Class R |
$ | 1,000.00 | $ | 1,017.60 | $ | 7.49 | 1.48 | % | ||||||||
Class R6 |
$ | 1,000.00 | $ | 1,020.60 | $ | 4.56 | 0.90 | % |
* | Class R6 had not commenced operations on April 1, 2014. Actual 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 183/365 (to reflect the one-half year period); 92/365 for Class R6 (to reflect the period from the commencement of operations on July 1, 2014 to September 30, 2014). The Example assumes that the $1,000 was invested at the net asset value per share determined at the close of business on March 31, 2014 (July 1, 2014 for Class R6). The Example reflects the expenses of both the Fund and the Portfolio. |
** | Hypothetical 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 183/365 (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 March 31, 2014 (July 1, 2014 for Class R6). The Example reflects the expenses of both the Fund and the Portfolio. |
6 |
Eaton Vance
Atlanta Capital SMID-Cap Fund
Statement of Assets and Liabilities
Assets | September 30, 2014 | |||
Investment in SMID-Cap Portfolio, at value (identified cost, $3,901,376,578) |
$ | 5,464,413,870 | ||
Receivable for Fund shares sold |
6,615,560 | |||
Total assets |
$ | 5,471,029,430 | ||
Liabilities | ||||
Payable for Fund shares redeemed |
$ | 14,851,939 | ||
Payable to affiliates: |
||||
Distribution and service fees |
556,425 | |||
Accrued expenses |
1,072,007 | |||
Total liabilities |
$ | 16,480,371 | ||
Net Assets |
$ | 5,454,549,059 | ||
Sources of Net Assets | ||||
Paid-in capital |
$ | 3,745,693,351 | ||
Accumulated net realized gain from Portfolio |
149,794,885 | |||
Accumulated net investment loss |
(3,976,469 | ) | ||
Net unrealized appreciation from Portfolio |
1,563,037,292 | |||
Total |
$ | 5,454,549,059 | ||
Class A Shares | ||||
Net Assets |
$ | 1,294,127,517 | ||
Shares Outstanding |
57,947,829 | |||
Net Asset Value and Redemption Price Per Share |
||||
(net assets ÷ shares of beneficial interest outstanding) |
$ | 22.33 | ||
Maximum Offering Price Per Share |
||||
(100 ÷ 94.25 of net asset value per share) |
$ | 23.69 | ||
Class C Shares | ||||
Net Assets |
$ | 237,887,024 | ||
Shares Outstanding |
11,063,882 | |||
Net Asset Value and Offering Price Per Share* |
||||
(net assets ÷ shares of beneficial interest outstanding) |
$ | 21.50 | ||
Class I Shares | ||||
Net Assets |
$ | 3,755,707,425 | ||
Shares Outstanding |
156,111,193 | |||
Net Asset Value, Offering Price and Redemption Price Per Share |
||||
(net assets ÷ shares of beneficial interest outstanding) |
$ | 24.06 | ||
Class R Shares | ||||
Net Assets |
$ | 166,574,657 | ||
Shares Outstanding |
7,552,165 | |||
Net Asset Value, Offering Price and Redemption Price Per Share |
||||
(net assets ÷ shares of beneficial interest outstanding) |
$ | 22.06 | ||
Class R6 Shares | ||||
Net Assets |
$ | 252,436 | ||
Shares Outstanding |
10,488 | |||
Net Asset Value, Offering Price and Redemption Price Per Share |
||||
(net assets ÷ shares of beneficial interest outstanding) |
$ | 24.07 |
On sales of $50,000 or more, the offering price of Class A shares is reduced.
* | Redemption price per share is equal to the net asset value less any applicable contingent deferred sales charge. |
7 | See Notes to Financial Statements. |
Eaton Vance
Atlanta Capital SMID-Cap Fund
Statement of Operations
Investment Income | Year Ended |
|||
Dividends allocated from Portfolio |
$ | 53,156,864 | ||
Interest allocated from Portfolio |
417,582 | |||
Expenses allocated from Portfolio |
(49,059,885 | ) | ||
Total investment income from Portfolio |
$ | 4,514,561 | ||
Expenses | ||||
Distribution and service fees |
||||
Class A |
$ | 4,144,572 | ||
Class C |
2,599,493 | |||
Class R |
697,330 | |||
Trustees’ fees and expenses |
500 | |||
Custodian fee |
63,133 | |||
Transfer and dividend disbursing agent fees |
4,972,332 | |||
Legal and accounting services |
94,249 | |||
Printing and postage |
558,713 | |||
Registration fees |
247,503 | |||
Miscellaneous |
34,458 | |||
Total expenses |
$ | 13,412,283 | ||
Net investment loss |
$ | (8,897,722 | ) | |
Realized and Unrealized Gain (Loss) from Portfolio |
||||
Net realized gain (loss) — |
||||
Investment transactions |
$ | 201,081,181 | ||
Net realized gain |
$ | 201,081,181 | ||
Change in unrealized appreciation (depreciation) — |
||||
Investments |
$ | 134,386,019 | ||
Net change in unrealized appreciation (depreciation) |
$ | 134,386,019 | ||
Net realized and unrealized gain |
$ | 335,467,200 | ||
Net increase in net assets from operations |
$ | 326,569,478 |
8 | See Notes to Financial Statements. |
Eaton Vance
Atlanta Capital SMID-Cap Fund
Statements of Changes in Net Assets
Year Ended September 30, | ||||||||
Increase (Decrease) in Net Assets | 2014 | 2013 | ||||||
From operations — |
||||||||
Net investment loss |
$ | (8,897,722 | ) | $ | (5,002,485 | ) | ||
Net realized gain from investment transactions |
201,081,181 | 37,566,362 | (1) | |||||
Net change in unrealized appreciation (depreciation) from investments |
134,386,019 | 1,008,175,043 | ||||||
Net increase in net assets from operations |
$ | 326,569,478 | $ | 1,040,738,920 | ||||
Distributions to shareholders — |
||||||||
From net realized gain |
||||||||
Class A |
$ | (11,194,718 | ) | $ | (3,614,168 | ) | ||
Class C |
(1,805,335 | ) | (573,093 | ) | ||||
Class I |
(21,120,548 | ) | (6,275,163 | ) | ||||
Class R |
(753,572 | ) | (84,480 | ) | ||||
Total distributions to shareholders |
$ | (34,874,173 | ) | $ | (10,546,904 | ) | ||
Transactions in shares of beneficial interest — |
||||||||
Proceeds from sale of shares |
||||||||
Class A |
$ | 411,949,762 | $ | 554,356,074 | ||||
Class C |
23,374,610 | 77,309,174 | ||||||
Class I |
1,373,517,220 | 1,382,820,033 | ||||||
Class R |
102,730,791 | 66,070,358 | ||||||
Class R6 |
258,829 | — | ||||||
Net asset value of shares issued to shareholders in payment of distributions declared |
||||||||
Class A |
10,438,714 | 3,385,399 | ||||||
Class C |
1,436,126 | 437,509 | ||||||
Class I |
16,027,473 | 4,903,115 | ||||||
Class R |
704,112 | 76,374 | ||||||
Cost of shares redeemed |
||||||||
Class A |
(789,724,722 | ) | (327,446,184 | ) | ||||
Class C |
(50,715,210 | ) | (28,998,030 | ) | ||||
Class I |
(998,705,614 | ) | (736,600,827 | ) | ||||
Class R |
(25,220,037 | ) | (10,629,402 | ) | ||||
Net increase in net assets from Fund share transactions |
$ | 76,072,054 | $ | 985,683,593 | ||||
Net increase in net assets |
$ | 367,767,359 | $ | 2,015,875,609 | ||||
Net Assets | ||||||||
At beginning of year |
$ | 5,086,781,700 | $ | 3,070,906,091 | ||||
At end of year |
$ | 5,454,549,059 | $ | 5,086,781,700 | ||||
Accumulated net investment loss included in net assets |
||||||||
At end of year |
$ | (3,976,469 | ) | $ | (7,206,496 | ) |
(1) | Includes $15,828,645 of net realized gains from redemptions in-kind. |
9 | See Notes to Financial Statements. |
Eaton Vance
Atlanta Capital SMID-Cap Fund
Financial Highlights
Class A | ||||||||||||||||||||
Year Ended September 30, | ||||||||||||||||||||
2014 | 2013 | 2012 | 2011 | 2010 | ||||||||||||||||
Net asset value — Beginning of year |
$ | 21.180 | $ | 16.520 | $ | 12.870 | $ | 12.490 | $ | 11.170 | ||||||||||
Income (Loss) From Operations | ||||||||||||||||||||
Net investment loss(1) |
$ | (0.062 | ) | $ | (0.044 | ) | $ | (0.070 | ) | $ | (0.074 | ) | $ | (0.072 | ) | |||||
Net realized and unrealized gain |
1.360 | 4.760 | 3.808 | 0.543 | (2) | 1.392 | ||||||||||||||
Total income from operations |
$ | 1.298 | $ | 4.716 | $ | 3.738 | $ | 0.469 | $ | 1.320 | ||||||||||
Less Distributions | ||||||||||||||||||||
From net realized gain |
$ | (0.148 | ) | $ | (0.056 | ) | $ | (0.088 | ) | $ | (0.089 | ) | $ | — | ||||||
Total distributions |
$ | (0.148 | ) | $ | (0.056 | ) | $ | (0.088 | ) | $ | (0.089 | ) | $ | — | ||||||
Net asset value — End of year |
$ | 22.330 | $ | 21.180 | $ | 16.520 | $ | 12.870 | $ | 12.490 | ||||||||||
Total Return(3) |
6.13 | % | 28.63 | % | 29.12 | % | 3.67 | % | 11.82 | % | ||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||
Net assets, end of year (000’s omitted) |
$ | 1,294,128 | $ | 1,566,425 | $ | 1,010,125 | $ | 512,020 | $ | 256,917 | ||||||||||
Ratios (as a percentage of average daily net assets): |
||||||||||||||||||||
Expenses(4)(5) |
1.23 | % | 1.25 | %(6) | 1.24 | %(7) | 1.20 | %(7) | 1.20 | %(7) | ||||||||||
Net investment loss |
(0.28 | )% | (0.24 | )% | (0.44 | )% | (0.51 | )% | (0.61 | )% | ||||||||||
Portfolio Turnover of the Portfolio |
11 | % | 9 | % | 6 | % | 19 | % | 20 | % |
(1) | Computed using average shares outstanding. |
(2) | The per share amount is not in accord with the net realized and unrealized gain (loss) on investments for the period because of the timing of sales of Fund shares and the amount of the per share realized and unrealized gains and losses at such time. |
(3) | 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. |
(4) | Includes the Fund’s share of the Portfolio’s allocated expenses. |
(5) | Excludes the effect of custody fee credits, if any, of less than 0.005%. |
(6) | The sub-adviser of the Portfolio subsidized certain operating expenses of the Fund (equal to 0.01% of average daily net assets for the year ended September 30, 2013). Absent this subsidy, total return would be lower. |
(7) | The investment adviser of the Portfolio waived a portion of its investment adviser fee and/or subsidized certain operating expenses and the administrator of the Fund subsidized certain operating expenses (equal to 0.08%, 0.18% and 0.32% of average daily net assets for the years ended September 30, 2012, 2011 and 2010, respectively). A portion of the waiver and subsidy was borne by the sub-adviser of the Portfolio. Absent this waiver and/or subsidy, total return would be lower. |
10 | See Notes to Financial Statements. |
Eaton Vance
Atlanta Capital SMID-Cap Fund
Financial Highlights — continued
Class C | ||||||||||||||||||||
Year Ended September 30, | ||||||||||||||||||||
2014 | 2013 | 2012 | 2011 | 2010* | ||||||||||||||||
Net asset value — Beginning of year |
$ | 20.550 | $ | 16.150 | $ | 12.680 | $ | 12.390 | $ | 11.170 | ||||||||||
Income (Loss) From Operations | ||||||||||||||||||||
Net investment loss(1) |
$ | (0.224 | ) | $ | (0.182 | ) | $ | (0.185 | ) | $ | (0.180 | ) | $ | (0.158 | ) | |||||
Net realized and unrealized gain |
1.322 | 4.638 | 3.743 | 0.559 | (2) | 1.378 | ||||||||||||||
Total income from operations |
$ | 1.098 | $ | 4.456 | $ | 3.558 | $ | 0.379 | $ | 1.220 | ||||||||||
Less Distributions | ||||||||||||||||||||
From net realized gain |
$ | (0.148 | ) | $ | (0.056 | ) | $ | (0.088 | ) | $ | (0.089 | ) | $ | — | ||||||
Total distributions |
$ | (0.148 | ) | $ | (0.056 | ) | $ | (0.088 | ) | $ | (0.089 | ) | $ | — | ||||||
Net asset value — End of year |
$ | 21.500 | $ | 20.550 | $ | 16.150 | $ | 12.680 | $ | 12.390 | ||||||||||
Total Return(3) |
5.35 | % | 27.68 | % | 28.13 | % | 2.97 | % | 10.92 | % | ||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||
Net assets, end of year (000’s omitted) |
$ | 237,887 | $ | 251,684 | $ | 152,264 | $ | 61,530 | $ | 17,530 | ||||||||||
Ratios (as a percentage of average daily net assets): |
||||||||||||||||||||
Expenses(4)(5) |
1.98 | % | 2.00 | %(6) | 1.99 | %(7) | 1.95 | %(7) | 1.95 | %(7) | ||||||||||
Net investment loss |
(1.03 | )% | (0.99 | )% | (1.19 | )% | (1.25 | )% | (1.34 | )% | ||||||||||
Portfolio Turnover of the Portfolio |
11 | % | 9 | % | 6 | % | 19 | % | 20 | % |
* | Class C commenced operations on October 1, 2009. |
(1) | Computed using average shares outstanding. |
(2) | The per share amount is not in accord with the net realized and unrealized gain (loss) on investments for the period because of the timing of sales of Fund shares and the amount of the per share realized and unrealized gains and losses at such time. |
(3) | 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. |
(4) | Includes the Fund’s share of the Portfolio’s allocated expenses. |
(5) | Excludes the effect of custody fee credits, if any, of less than 0.005%. |
(6) | The sub-adviser of the Portfolio subsidized certain operating expenses of the Fund (equal to 0.01% of average daily net assets for the year ended September 30, 2013). Absent this subsidy, total return would be lower. |
(7) | The investment adviser of the Portfolio waived a portion of its investment adviser fee and/or subsidized certain operating expenses and the administrator of the Fund subsidized certain operating expenses (equal to 0.08%, 0.18% and 0.32% of average daily net assets for the years ended September 30, 2012, 2011 and 2010, respectively). A portion of the waiver and subsidy was borne by the sub-adviser of the Portfolio. Absent this waiver and/or subsidy, total return would be lower. |
11 | See Notes to Financial Statements. |
Eaton Vance
Atlanta Capital SMID-Cap Fund
Financial Highlights — continued
Class I | ||||||||||||||||||||
Year Ended September 30, | ||||||||||||||||||||
2014 | 2013 | 2012 | 2011 | 2010 | ||||||||||||||||
Net asset value — Beginning of year |
$ | 22.750 | $ | 17.700 | $ | 13.750 | $ | 13.300 | $ | 11.870 | ||||||||||
Income (Loss) From Operations | ||||||||||||||||||||
Net investment income (loss)(1) |
$ | (0.006 | ) | $ | 0.003 | $ | (0.033 | ) | $ | (0.040 | ) | $ | (0.044 | ) | ||||||
Net realized and unrealized gain |
1.464 | 5.103 | 4.071 | 0.579 | (2) | 1.474 | ||||||||||||||
Total income from operations |
$ | 1.458 | $ | 5.106 | $ | 4.038 | $ | 0.539 | $ | 1.430 | ||||||||||
Less Distributions | ||||||||||||||||||||
From net realized gain |
$ | (0.148 | ) | $ | (0.056 | ) | $ | (0.088 | ) | $ | (0.089 | ) | $ | — | ||||||
Total distributions |
$ | (0.148 | ) | $ | (0.056 | ) | $ | (0.088 | ) | $ | (0.089 | ) | $ | — | ||||||
Net asset value — End of year |
$ | 24.060 | $ | 22.750 | $ | 17.700 | $ | 13.750 | $ | 13.300 | ||||||||||
Total Return(3) |
6.42 | % | 28.93 | % | 29.43 | % | 3.98 | % | 12.05 | % | ||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||
Net assets, end of year (000’s omitted) |
$ | 3,755,707 | $ | 3,184,642 | $ | 1,890,595 | $ | 815,413 | $ | 296,476 | ||||||||||
Ratios (as a percentage of average daily net assets): |
||||||||||||||||||||
Expenses(4)(5) |
0.98 | % | 1.00 | %(6) | 0.99 | %(7) | 0.95 | %(7) | 0.95 | %(7) | ||||||||||
Net investment income (loss) |
(0.03 | )% | 0.02 | % | (0.19 | )% | (0.26 | )% | (0.35 | )% | ||||||||||
Portfolio Turnover of the Portfolio |
11 | % | 9 | % | 6 | % | 19 | % | 20 | % |
(1) | Computed using average shares outstanding. |
(2) | The per share amount is not in accord with the net realized and unrealized gain (loss) on investments for the period because of the timing of sales of Fund shares and the amount of the per share realized and unrealized gains and losses at such time. |
(3) | Returns are historical and are calculated by determining the percentage change in net asset value with all distributions reinvested. |
(4) | Includes the Fund’s share of the Portfolio’s allocated expenses. |
(5) | Excludes the effect of custody fee credits, if any, of less than 0.005%. |
(6) | The sub-adviser of the Portfolio subsidized certain operating expenses of the Fund (equal to 0.01% of average daily net assets for the year ended September 30, 2013). Absent this subsidy, total return would be lower. |
(7) | The investment adviser of the Portfolio waived a portion of its investment adviser fee and/or subsidized certain operating expenses and the administrator of the Fund subsidized certain operating expenses (equal to 0.08%, 0.18% and 0.32% of average daily net assets for the years ended September 30, 2012, 2011 and 2010, respectively). A portion of the waiver and subsidy was borne by the sub-adviser of the Portfolio. Absent this waiver and/or subsidy, total return would be lower. |
12 | See Notes to Financial Statements. |
Eaton Vance
Atlanta Capital SMID-Cap Fund
Financial Highlights — continued
Class R | ||||||||||||||||||||
Year Ended September 30, | ||||||||||||||||||||
2014 | 2013 | 2012 | 2011 | 2010 | ||||||||||||||||
Net asset value — Beginning of year |
$ | 20.970 | $ | 16.400 | $ | 12.810 | $ | 12.450 | $ | 11.170 | ||||||||||
Income (Loss) From Operations | ||||||||||||||||||||
Net investment loss(1) |
$ | (0.110 | ) | $ | (0.094 | ) | $ | (0.111 | ) | $ | (0.109 | ) | $ | (0.092 | ) | |||||
Net realized and unrealized gain |
1.348 | 4.720 | 3.789 | 0.558 | (2) | 1.372 | ||||||||||||||
Total income from operations |
$ | 1.238 | $ | 4.626 | $ | 3.678 | $ | 0.449 | $ | 1.280 | ||||||||||
Less Distributions | ||||||||||||||||||||
From net realized gain |
$ | (0.148 | ) | $ | (0.056 | ) | $ | (0.088 | ) | $ | (0.089 | ) | $ | — | ||||||
Total distributions |
$ | (0.148 | ) | $ | (0.056 | ) | $ | (0.088 | ) | $ | (0.089 | ) | $ | — | ||||||
Net asset value — End of year |
$ | 22.060 | $ | 20.970 | $ | 16.400 | $ | 12.810 | $ | 12.450 | ||||||||||
Total Return(3) |
5.91 | % | 28.29 | % | 28.78 | % | 3.53 | % | 11.46 | % | ||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||
Net assets, end of year (000’s omitted) |
$ | 166,575 | $ | 84,030 | $ | 17,922 | $ | 1,827 | $ | 98 | ||||||||||
Ratios (as a percentage of average daily net assets): |
||||||||||||||||||||
Expenses(4)(5) |
1.48 | % | 1.50 | %(6) | 1.49 | %(7) | 1.45 | %(7) | 1.45 | %(7) | ||||||||||
Net investment loss |
(0.50 | )% | (0.49 | )% | (0.70 | )% | (0.74 | )% | (0.78 | )% | ||||||||||
Portfolio Turnover of the Portfolio |
11 | % | 9 | % | 6 | % | 19 | % | 20 | % |
(1) | Computed using average shares outstanding. |
(2) | The per share amount is not in accord with the net realized and unrealized gain (loss) on investments for the period because of the timing of sales of Fund shares and the amount of the per share realized and unrealized gains and losses at such time. |
(3) | Returns are historical and are calculated by determining the percentage change in net asset value with all distributions reinvested. |
(4) | Includes the Fund’s share of the Portfolio’s allocated expenses. |
(5) | Excludes the effect of custody fee credits, if any, of less than 0.005%. |
(6) | The sub-adviser of the Portfolio subsidized certain operating expenses of the Fund (equal to 0.01% of average daily net assets for the year ended September 30, 2013). Absent this subsidy, total return would be lower. |
(7) | The investment adviser of the Portfolio waived a portion of its investment adviser fee and/or subsidized certain operating expenses and the administrator of the Fund subsidized certain operating expenses (equal to 0.08%, 0.18% and 0.32% of average daily net assets for the years ended September 30, 2012, 2011 and 2010, respectively). A portion of the waiver and subsidy was borne by the sub-adviser of the Portfolio. Absent this waiver and/or subsidy, total return would be lower. |
13 | See Notes to Financial Statements. |
Eaton Vance
Atlanta Capital SMID-Cap Fund
Financial Highlights — continued
Class R6 | ||||
Period Ended |
||||
Net asset value — Beginning of period |
$ | 25.040 | ||
Income (Loss) From Operations | ||||
Net investment income(2) |
$ | 0.022 | ||
Net realized and unrealized loss |
(0.992 | ) | ||
Total loss from operations |
$ | (0.970 | ) | |
Net asset value — End of period |
$ | 24.070 | ||
Total Return(3) |
(3.87 | )%(4) | ||
Ratios/Supplemental Data | ||||
Net assets, end of period (000’s omitted) |
$ | 252 | ||
Ratios (as a percentage of average daily net assets): |
||||
Expenses(5)(6) |
0.90 | %(7) | ||
Net investment income |
0.35 | %(7) | ||
Portfolio Turnover of the Portfolio |
11 | %(8) |
(1) | For the period from the commencement of operations, July 1, 2014, to September 30, 2014. |
(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) | Not annualized. |
(5) | Includes the Fund’s share of the Portfolio’s allocated expenses. |
(6) | Excludes the effect of custody fee credits, if any, of less than 0.005%. |
(7) | Annualized. |
(8) | For the Portfolio’s year ended September 30, 2014. |
14 | See Notes to Financial Statements. |
Eaton Vance
Atlanta Capital SMID-Cap Fund
Notes to Financial Statements
1 Significant Accounting Policies
Eaton Vance Atlanta Capital SMID-Cap Fund (the Fund) is a diversified series of Eaton Vance Growth 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 offers five classes of shares. Class A shares are generally sold subject to a sales charge imposed at time of purchase. Class C shares are sold at net asset value and are generally subject to a contingent deferred sales charge (see Note 5). Class I, Class R and Class R6 shares are sold at net asset value and are not subject to a sales charge. Effective after the close of business on January 15, 2013, the Fund was closed to new investors, subject to limited exceptions. 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. Sub-accounting, recordkeeping and similar administrative fees payable to financial intermediaries, which are a component of transfer and dividend disbursing agent fees on the Statement of Operations, are not allocated to Class R6 shares. Each class of shares differs in its distribution plan and certain other class-specific expenses. The Fund invests all of its investable assets in interests in SMID-Cap Portfolio (the Portfolio), a Massachusetts business trust, having the same investment objective and policies as the Fund. The value of the Fund’s investment in the Portfolio reflects the Fund’s proportionate interest in the net assets of the Portfolio (99.9% at September 30, 2014). The performance of the Fund is directly affected by the performance of the Portfolio. The financial statements of the Portfolio, including the portfolio of investments, are included elsewhere in this report and should be read in conjunction with the Fund’s financial statements.
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. 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 — Valuation of securities by the Portfolio is discussed in Note 1A of the Portfolio’s Notes to Financial Statements, which are included elsewhere in this report.
B Income — The Fund’s net investment income or loss consists of the Fund’s pro-rata share of the net investment income or loss of the Portfolio, less all actual and accrued expenses of the Fund.
C 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.
At September 30, 2014, the Fund had a late year ordinary loss of $3,976,469 which it has elected to defer to the following taxable year pursuant to income tax regulations. Late year ordinary losses represent certain specified losses realized in that portion of a taxable year after October 31 that are treated as ordinary for tax purposes plus ordinary losses attributable to that portion of a taxable year after December 31.
As of September 30, 2014, 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.
D 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.
E Expense Reduction — State Street Bank and Trust Company (SSBT) serves as custodian of the Fund. Pursuant to the custodian agreement, SSBT receives a fee reduced by credits, which are determined based on the average daily cash balance the Fund maintains with SSBT. All credit balances, if any, used to reduce the Fund’s custodian fees are reported as a reduction of expenses in the Statement of Operations.
F Use of Estimates — The preparation of the financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of income and expense during the reporting period. Actual results could differ from those estimates.
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 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 Other — Investment transactions are accounted for on a trade date basis. Dividends to shareholders are recorded on the ex-dividend date.
15 |
Eaton Vance
Atlanta Capital SMID-Cap Fund
Notes to Financial Statements — continued
2 Distributions to Shareholders
It is the present policy of the Fund to make at least one distribution annually (normally in December) 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 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. The Fund distinguishes between distributions on a tax basis and a financial reporting basis. Accounting principles generally accepted in the United States of America require that only distributions in excess of tax basis earnings and profits be reported in the financial statements as a return of capital. Permanent differences between book and tax accounting relating to distributions are reclassified to paid-in capital. For tax purposes, distributions from short-term capital gains are considered to be from ordinary income.
The tax character of distributions declared for the years ended September 30, 2014 and September 30, 2013 was as follows:
Year Ended September 30, | ||||||||
2014 | 2013 | |||||||
Distributions declared from: |
||||||||
Long-term capital gains |
$ | 34,874,173 | $ | 10,546,904 |
During the year ended September 30, 2014, accumulated net realized gain was decreased by $32,907,849, accumulated net investment loss was decreased by $12,127,749 and paid-in capital was increased by $20,780,100 due to the Fund’s use of equalization accounting and differences between book and tax accounting, primarily for net operating losses and investments in partnerships. Tax equalization accounting allows the Fund to treat as a distribution that portion of redemption proceeds representing a redeeming shareholder’s portion of undistributed taxable income and net capital gains. These reclassifications had no effect on the net assets or net asset value per share of the Fund.
As of September 30, 2014, the components of distributable earnings (accumulated losses) and unrealized appreciation (depreciation) on a tax basis were as follows:
Undistributed long-term capital gains |
$ | 153,219,177 | ||
Late year ordinary losses |
$ | (3,976,469 | ) | |
Net unrealized appreciation |
$ | 1,559,613,000 |
The differences between components of distributable earnings (accumulated losses) on a tax basis and the amounts reflected in the Statement of Assets and Liabilities are primarily due to wash sales, partnership allocations and investments in partnerships.
3 Transactions with Affiliates
Eaton Vance Management (EVM) serves as the administrator to the Fund, but receives no compensation. Atlanta Capital Management Company, LLC (Atlanta Capital), the sub-adviser of the Portfolio and an affiliate of EVM, has agreed to reimburse the Fund’s expenses to the extent that total annual operating expenses (relating to ordinary operating expenses only) exceed 1.25%, 2.00%, 1.00%, 1.50% and 0.92% of the Fund’s average daily net assets for Class A, Class C, Class I, Class R and Class R6, respectively. The agreement may be changed or terminated after January 31, 2015. Pursuant to this agreement, Atlanta Capital reimbursed no expenses for the year ended September 30, 2014. The Portfolio has engaged Boston Management and Research (BMR), a subsidiary of EVM, to render investment advisory services. See Note 2 of the Portfolio’s Notes to Financial Statements which are included elsewhere in this report.
EVM provides sub-transfer agency and related services to the Fund pursuant to a Sub-Transfer Agency Support Services Agreement. For the year ended September 30, 2014, EVM earned $55,874 from the Fund pursuant to such agreement, which is included in transfer and dividend disbursing agent fees on the Statement of Operations. The Fund was informed that Eaton Vance Distributors, Inc. (EVD), an affiliate of EVM and the Fund’s principal underwriter, received $39,985 as its portion of the sales charge on sales of Class A shares for the year ended September 30, 2014. EVD also received distribution and service fees from Class A, Class C and Class R shares (see Note 4) and contingent deferred sales charges (see Note 5).
Trustees and officers of the Fund who are members of EVM’s or BMR’s organizations receive remuneration for their services to the Fund out of the investment adviser fee. Certain officers and Trustees of the Fund and the Portfolio are officers of the above organizations.
4 Distribution Plans
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
16 |
Eaton Vance
Atlanta Capital SMID-Cap Fund
Notes to Financial Statements — continued
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 year ended September 30, 2014 amounted to $4,144,572 for Class A shares.
The Fund also has in effect distribution plans for Class C shares (Class C Plan) and Class R shares (Class R Plan) pursuant to Rule 12b-1 under the 1940 Act. Pursuant to the Class C Plan, the Fund pays EVD amounts equal to 0.75% per annum of its average daily net assets attributable to Class C shares for providing ongoing distribution services and facilities to the Fund. For the year ended September 30, 2014, the Fund paid or accrued to EVD $1,949,620 for Class C shares.
The Class R Plan requires the Fund to pay EVD an amount up to 0.50% per annum of its average daily net assets attributable to Class R shares for providing ongoing distribution services and facilities to the Fund. The Trustees of the Trust have currently limited Class R distribution payments to 0.25% per annum of the average daily net assets attributable to Class R shares. For the year ended September 30, 2014, the Fund paid or accrued to EVD $348,665 for Class R shares.
Pursuant to the Class C and Class R Plans, the Fund also makes payments of service fees to EVD, financial intermediaries and other persons in amounts equal to 0.25% per annum of its average daily net assets attributable to that class. Service fees paid or accrued are for personal services and/or the maintenance of shareholder accounts. They are separate and distinct from the sales commissions and distribution fees payable to EVD. Service fees paid or accrued for the year ended September 30, 2014 amounted to $649,873 and $348,665 for Class C and Class R shares, respectively.
Distribution and service fees are subject to the limitations contained in the Financial Industry Regulatory Authority’s NASD Conduct Rule 2830(d).
5 Contingent Deferred Sales Charges
A contingent deferred sales charge (CDSC) of 1% generally is imposed on redemptions of Class C shares made within one year of purchase. Class A shares may be subject to a 1% CDSC if redeemed within 18 months of purchase (depending on the circumstances of purchase). 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 year ended September 30, 2014, the Fund was informed that EVD received approximately $2,000 and $16,000 of CDSCs paid by Class A and Class C shareholders, respectively.
6 Investment Transactions
For the year ended September 30, 2014, increases and decreases in the Fund’s investment in the Portfolio aggregated $534,988,390 and $493,300,523, respectively.
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:
Year Ended September 30, | ||||||||
Class A | 2014 | 2013 | ||||||
Sales |
18,414,321 | 30,057,056 | ||||||
Issued to shareholders electing to receive payments of distributions in Fund shares |
472,768 | 200,676 | ||||||
Redemptions |
(34,888,379 | ) | (17,448,182 | ) | ||||
Net increase (decrease) |
(16,001,290 | ) | 12,809,550 | |||||
Year Ended September 30, | ||||||||
Class C | 2014 | 2013 | ||||||
Sales |
1,081,206 | 4,368,433 | ||||||
Issued to shareholders electing to receive payments of distributions in Fund shares |
67,172 | 26,564 | ||||||
Redemptions |
(2,330,843 | ) | (1,575,973 | ) | ||||
Net increase (decrease) |
(1,182,465 | ) | 2,819,024 |
17 |
Eaton Vance
Atlanta Capital SMID-Cap Fund
Notes to Financial Statements — continued
Year Ended September 30, | ||||||||
Class I | 2014 | 2013 | ||||||
Sales |
56,701,871 | 69,521,779 | ||||||
Issued to shareholders electing to receive payments of distributions in Fund shares |
675,410 | 271,040 | ||||||
Redemptions |
(41,243,314 | ) | (36,648,840 | ) | ||||
Net increase |
16,133,967 | 33,143,979 | ||||||
Year Ended September 30, | ||||||||
Class R | 2014 | 2013 | ||||||
Sales |
4,643,737 | 3,472,797 | ||||||
Issued to shareholders electing to receive payments of distributions in Fund shares |
32,224 | 4,562 | ||||||
Redemptions |
(1,130,121 | ) | (563,859 | ) | ||||
Net increase |
3,545,840 | 2,913,500 | ||||||
Class R6 | Period Ended September 30, 2014(1) |
|||||||
Sales |
10,488 | |||||||
Net increase |
10,488 |
(1) | Class R6 commenced operations on July 1, 2014. |
18 |
Eaton Vance
Atlanta Capital SMID-Cap Fund
Report of Independent Registered Public Accounting Firm
To the Trustees of Eaton Vance Growth Trust and Shareholders of Eaton Vance Atlanta Capital SMID-Cap Fund:
We have audited the accompanying statement of assets and liabilities of Eaton Vance Atlanta Capital SMID-Cap Fund (the “Fund”) (one of the funds constituting Eaton Vance Growth Trust), as of September 30, 2014, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the periods presented. These financial statements and financial highlights are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. The Fund is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Fund’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Eaton Vance Atlanta Capital SMID-Cap Fund as of September 30, 2014, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the periods presented, in conformity with accounting principles generally accepted in the United States of America.
DELOITTE & TOUCHE LLP
Boston, Massachusetts
19 |
Eaton Vance
Atlanta Capital SMID-Cap Fund
Federal Tax Information (Unaudited)
The Form 1099-DIV you receive in February 2015 will show the tax status of all distributions paid to your account in calendar year 2014. Shareholders are advised to consult their own tax adviser with respect to the tax consequences of their investment in the Fund. As required by the Internal Revenue Code and/or regulations, shareholders must be notified regarding the status of capital gains dividends.
Capital Gains Dividends. The Fund hereby designates as a capital gain dividend with respect to the taxable year ended September 30, 2014, $198,937,752 or, if subsequently determined to be different, the net capital gain of such year.
20 |
SMID-Cap Portfolio
Portfolio of Investments
Common Stocks — 97.7% | ||||||||
Security | Shares | Value | ||||||
Aerospace & Defense — 1.6% |
| |||||||
TransDigm Group, Inc. |
461,877 | $ | 85,137,787 | |||||
$ | 85,137,787 | |||||||
Auto Components — 1.9% |
| |||||||
Gentex Corp. |
3,836,820 | $ | 102,711,671 | |||||
$ | 102,711,671 | |||||||
Banks — 5.7% |
| |||||||
City National Corp. |
1,873,791 | $ | 141,789,765 | |||||
Cullen/Frost Bankers, Inc. |
1,095,047 | 83,782,046 | ||||||
Umpqua Holdings Corp. |
5,189,481 | 85,470,752 | ||||||
$ | 311,042,563 | |||||||
Capital Markets — 6.1% |
| |||||||
Affiliated Managers Group, Inc.(1) |
612,973 | $ | 122,815,270 | |||||
Artisan Partners Asset Management, Inc., Class A |
1,212,729 | 63,122,545 | ||||||
SEI Investments Co. |
4,104,836 | 148,430,870 | ||||||
$ | 334,368,685 | |||||||
Chemicals — 1.6% |
| |||||||
Airgas, Inc. |
794,223 | $ | 87,880,775 | |||||
$ | 87,880,775 | |||||||
Commercial Services & Supplies — 1.1% |
| |||||||
Copart, Inc.(1) |
2,014,216 | $ | 63,075,174 | |||||
$ | 63,075,174 | |||||||
Construction & Engineering — 0.8% |
| |||||||
Jacobs Engineering Group, Inc.(1) |
921,670 | $ | 44,995,929 | |||||
$ | 44,995,929 | |||||||
Containers & Packaging — 1.9% |
| |||||||
AptarGroup, Inc. |
1,678,877 | $ | 101,907,834 | |||||
$ | 101,907,834 | |||||||
Distributors — 2.0% |
| |||||||
LKQ Corp.(1) |
4,225,309 | $ | 112,350,966 | |||||
$ | 112,350,966 | |||||||
Security | Shares | Value | ||||||
Electrical Equipment — 2.0% |
| |||||||
Acuity Brands, Inc. |
933,261 | $ | 109,854,152 | |||||
$ | 109,854,152 | |||||||
Electronic Equipment, Instruments & Components — 1.3% |
| |||||||
FLIR Systems, Inc. |
2,338,787 | $ | 73,297,585 | |||||
$ | 73,297,585 | |||||||
Energy Equipment & Services — 2.2% |
| |||||||
Dril-Quip, Inc.(1) |
511,168 | $ | 45,698,419 | |||||
Oceaneering International, Inc. |
1,119,608 | 72,964,854 | ||||||
$ | 118,663,273 | |||||||
Health Care Equipment & Supplies — 7.8% |
| |||||||
DENTSPLY International, Inc. |
3,772,036 | $ | 172,004,842 | |||||
IDEXX Laboratories, Inc.(1) |
707,305 | 83,341,748 | ||||||
Teleflex, Inc. |
807,609 | 84,831,249 | ||||||
Varian Medical Systems, Inc.(1) |
1,049,453 | 84,082,174 | ||||||
$ | 424,260,013 | |||||||
Health Care Providers & Services — 2.8% |
| |||||||
Henry Schein, Inc.(1) |
1,338,712 | $ | 155,919,787 | |||||
$ | 155,919,787 | |||||||
Household Products — 1.8% |
| |||||||
Church & Dwight Co., Inc. |
1,439,432 | $ | 100,990,549 | |||||
$ | 100,990,549 | |||||||
Industrial Conglomerates — 2.5% |
| |||||||
Carlisle Cos., Inc. |
1,676,389 | $ | 134,748,148 | |||||
$ | 134,748,148 | |||||||
Insurance — 8.5% |
| |||||||
HCC Insurance Holdings, Inc. |
4,426,534 | $ | 213,757,327 | |||||
Markel Corp.(1) |
396,890 | 252,481,573 | ||||||
$ | 466,238,900 | |||||||
IT Services — 4.6% |
| |||||||
Gartner, Inc.(1) |
1,008,077 | $ | 74,063,417 | |||||
Jack Henry & Associates, Inc. |
1,992,898 | 110,924,703 | ||||||
WEX, Inc.(1) |
596,790 | 65,837,873 | ||||||
$ | 250,825,993 | |||||||
21 | See Notes to Financial Statements. |
SMID-Cap Portfolio
Portfolio of Investments — continued
Security | Shares | Value | ||||||
Life Sciences Tools & Services — 3.8% |
| |||||||
Bio-Rad Laboratories, Inc., Class A(1) |
1,158,858 | $ | 131,414,497 | |||||
Mettler-Toledo International, Inc.(1) |
291,363 | 74,626,805 | ||||||
$ | 206,041,302 | |||||||
Machinery — 8.6% |
| |||||||
CLARCOR, Inc. |
1,988,228 | $ | 125,417,422 | |||||
Donaldson Co., Inc. |
1,664,189 | 67,615,999 | ||||||
Graco, Inc. |
1,114,991 | 81,372,043 | ||||||
IDEX Corp. |
1,920,653 | 138,997,658 | ||||||
Pall Corp. |
687,594 | 57,551,618 | ||||||
$ | 470,954,740 | |||||||
Marine — 3.6% |
| |||||||
Kirby Corp.(1) |
1,657,882 | $ | 195,381,394 | |||||
$ | 195,381,394 | |||||||
Media — 3.5% |
| |||||||
Morningstar, Inc. |
2,843,529 | $ | 193,075,619 | |||||
$ | 193,075,619 | |||||||
Professional Services — 2.5% |
| |||||||
Equifax, Inc. |
1,817,305 | $ | 135,825,376 | |||||
$ | 135,825,376 | |||||||
Real Estate Management & Development — 1.6% |
| |||||||
Forest City Enterprises, Inc., Class A(1) |
4,404,183 | $ | 86,145,819 | |||||
$ | 86,145,819 | |||||||
Road & Rail — 2.1% |
| |||||||
J.B. Hunt Transport Services, Inc. |
1,263,492 | $ | 93,561,582 | |||||
Landstar System, Inc. |
268,594 | 19,389,801 | ||||||
$ | 112,951,383 | |||||||
Software — 11.0% |
| |||||||
ANSYS, Inc.(1) |
2,495,304 | $ | 188,819,654 | |||||
Blackbaud, Inc. |
3,185,169 | 125,145,290 | ||||||
FactSet Research Systems, Inc. |
796,405 | 96,787,100 | ||||||
Fair Isaac Corp. |
2,065,007 | 113,781,886 | ||||||
Manhattan Associates, Inc.(1) |
417,672 | 13,958,598 | ||||||
Solera Holdings, Inc. |
1,121,768 | 63,222,844 | ||||||
$ | 601,715,372 | |||||||
Security | Shares | Value | ||||||
Specialty Retail — 3.8% |
| |||||||
Aaron’s, Inc. |
364,600 | $ | 8,867,072 | |||||
CarMax, Inc.(1) |
654,690 | 30,410,351 | ||||||
Sally Beauty Holdings, Inc.(1) |
6,211,682 | 170,013,736 | ||||||
$ | 209,291,159 | |||||||
Textiles, Apparel & Luxury Goods — 1.0% |
| |||||||
Columbia Sportswear Co. |
1,573,252 | $ | 56,290,957 | |||||
$ | 56,290,957 | |||||||
Total Common Stocks |
|
$ | 5,345,942,905 | |||||
Short-Term Investments — 2.4% | ||||||||
Description | Interest (000’s omitted) |
Value | ||||||
Eaton Vance Cash Reserves Fund, LLC, 0.14%(2) |
$ | 130,789 | $ | 130,789,222 | ||||
Total Short-Term Investments |
|
$ | 130,789,222 | |||||
Total Investments — 100.1% |
|
$ | 5,476,732,127 | |||||
Other Assets, Less Liabilities — (0.1)% |
|
$ | (6,428,884 | ) | ||||
Net Assets — 100.0% |
|
$ | 5,470,303,243 | |||||
The percentage shown for each investment category in the Portfolio of Investments is based on net assets.
(1) | Non-income producing security. |
(2) | 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 September 30, 2014. |
22 | See Notes to Financial Statements. |
SMID-Cap Portfolio
Statement of Assets and Liabilities
Assets | September 30, 2014 | |||
Unaffiliated investments, at value (identified cost, $3,778,122,201) |
$ | 5,345,942,905 | ||
Affiliated investment, at value (identified cost, $130,789,222) |
130,789,222 | |||
Dividends receivable |
2,353,309 | |||
Interest receivable from affiliated investment |
17,959 | |||
Receivable for investments sold |
11,233,155 | |||
Total assets |
$ | 5,490,336,550 | ||
Liabilities | ||||
Payable for investments purchased |
$ | 15,865,375 | ||
Payable to affiliates: |
||||
Investment adviser fee |
3,957,797 | |||
Accrued expenses |
210,135 | |||
Total liabilities |
$ | 20,033,307 | ||
Net Assets applicable to investors’ interest in Portfolio |
$ | 5,470,303,243 | ||
Sources of Net Assets | ||||
Investors’ capital |
$ | 3,902,482,539 | ||
Net unrealized appreciation |
1,567,820,704 | |||
Total |
$ | 5,470,303,243 |
23 | See Notes to Financial Statements. |
SMID-Cap Portfolio
Statement of Operations
Investment Income | Year Ended |
|||
Dividends |
$ | 53,212,011 | ||
Interest allocated from affiliated investment |
418,008 | |||
Expenses allocated from affiliated investment |
(53,287 | ) | ||
Total investment income |
$ | 53,576,732 | ||
Expenses | ||||
Investment adviser fee |
$ | 47,836,209 | ||
Trustees’ fees and expenses |
68,000 | |||
Custodian fee |
882,359 | |||
Legal and accounting services |
122,643 | |||
Miscellaneous |
147,822 | |||
Total expenses |
$ | 49,057,033 | ||
Deduct — |
||||
Reduction of custodian fee |
$ | 8 | ||
Total expense reductions |
$ | 8 | ||
Net expenses |
$ | 49,057,025 | ||
Net investment income |
$ | 4,519,707 | ||
Realized and Unrealized Gain (Loss) | ||||
Net realized gain (loss) — |
||||
Investment transactions |
$ | 201,445,402 | ||
Investment transactions allocated from affiliated investment |
4,712 | |||
Net realized gain |
$ | 201,450,114 | ||
Change in unrealized appreciation (depreciation) — |
||||
Investments |
$ | 134,347,992 | ||
Net change in unrealized appreciation (depreciation) |
$ | 134,347,992 | ||
Net realized and unrealized gain |
$ | 335,798,106 | ||
Net increase in net assets from operations |
$ | 340,317,813 |
24 | See Notes to Financial Statements. |
SMID-Cap Portfolio
Statements of Changes in Net Assets
Year Ended September 30, | ||||||||
Increase (Decrease) in Net Assets | 2014 | 2013 | ||||||
From operations — |
||||||||
Net investment income |
$ | 4,519,707 | $ | 5,101,228 | ||||
Net realized gain from investment transactions |
201,450,114 | 37,674,854 | (1) | |||||
Net change in unrealized appreciation (depreciation) from investments |
134,347,992 | 1,009,849,280 | ||||||
Net increase in net assets from operations |
$ | 340,317,813 | $ | 1,052,625,362 | ||||
Capital transactions — |
||||||||
Contributions |
$ | 536,641,842 | $ | 1,121,088,986 | ||||
Withdrawals |
(497,203,096 | ) | (154,537,608 | ) | ||||
Net increase in net assets from capital transactions |
$ | 39,438,746 | $ | 966,551,378 | ||||
Net increase in net assets |
$ | 379,756,559 | $ | 2,019,176,740 | ||||
Net Assets | ||||||||
At beginning of year |
$ | 5,090,546,684 | $ | 3,071,369,944 | ||||
At end of year |
$ | 5,470,303,243 | $ | 5,090,546,684 |
(1) | Includes $15,891,640 of net realized gains from redemptions in-kind. |
25 | See Notes to Financial Statements. |
SMID-Cap Portfolio
Supplementary Data
Year Ended September 30, | ||||||||||||||||||||
Ratios/Supplemental Data | 2014 | 2013 | 2012 | 2011 | 2010 | |||||||||||||||
Ratios (as a percentage of average daily net assets): |
||||||||||||||||||||
Expenses(1)(2) |
0.87 | % | 0.89 | % | 0.94 | % | 0.95 | % | 0.95 | % | ||||||||||
Net investment income (loss) |
0.08 | % | 0.12 | % | (0.14 | )% | (0.26 | )% | (0.36 | )% | ||||||||||
Portfolio Turnover |
11 | % | 9 | % | 6 | % | 19 | % | 20 | % | ||||||||||
Total Return |
6.53 | % | 29.07 | % | 29.50 | % | 3.98 | % | 12.05 | % | ||||||||||
Net assets, end of year (000’s omitted) |
$ | 5,470,303 | $ | 5,090,547 | $ | 3,071,370 | $ | 1,397,652 | $ | 574,748 |
(1) | The investment adviser waived a portion of its investment adviser fee and/or subsidized certain operating expenses (equal to 0.04% and 0.12% of average daily net assets for the years ended September 30, 2011 and 2010, respectively). A portion of the waiver and subsidy was borne by the sub-adviser. Absent this waiver and/or subsidy, total return would be lower. |
(2) | Excludes the effect of custody fee credits, if any, of less than 0.005%. |
26 | See Notes to Financial Statements. |
SMID-Cap Portfolio
Notes to Financial Statements
1 Significant Accounting Policies
SMID-Cap Portfolio (the Portfolio) is a Massachusetts business trust registered under the Investment Company Act of 1940, as amended (the 1940 Act), as a diversified, open-end management investment company. The Portfolio’s investment objective is to seek long-term capital growth. The Declaration of Trust permits the Trustees to issue interests in the Portfolio. At September 30, 2014, Eaton Vance Atlanta Capital SMID-Cap Fund held a 99.9% interest in the Portfolio.
The following is a summary of significant accounting policies of the Portfolio. The policies are in conformity with accounting principles generally accepted in the United States of America. The Portfolio 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.
Debt Obligations. Short-term obligations purchased with a remaining maturity of sixty days or less are generally valued at amortized cost, which approximates market value.
Affiliated Fund. The Portfolio may invest in Eaton Vance Cash Reserves Fund, LLC (Cash Reserves Fund), an affiliated investment company managed by Eaton Vance Management (EVM). The value of the Portfolio’s investment in Cash Reserves Fund reflects the Portfolio’s proportionate interest in its net assets. Cash Reserves Fund generally values its investment securities utilizing the amortized cost valuation technique in accordance with Rule 2a-7 under the 1940 Act. This technique involves initially valuing a portfolio security at its cost and thereafter assuming a constant amortization to maturity of any discount or premium. If amortized cost is determined not to approximate fair value, Cash Reserves Fund may value its investment securities based on available market quotations provided by a third party pricing service.
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 Portfolio in a manner that fairly reflects the security’s value, or the amount that the Portfolio 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. Interest income is recorded on the basis of interest accrued, adjusted for amortization of premium or accretion of discount.
D Federal Taxes — The Portfolio has elected to be treated as a partnership for federal tax purposes. No provision is made by the Portfolio for federal or state taxes on any taxable income of the Portfolio because each investor in the Portfolio is ultimately responsible for the payment of any taxes on its share of taxable income. Since at least one of the Portfolio’s investors is a regulated investment company that invests all or substantially all of its assets in the Portfolio, the Portfolio normally must satisfy the applicable source of income and diversification requirements (under the Internal Revenue Code) in order for its investors to satisfy them. The Portfolio will allocate, at least annually among its investors, each investor’s distributive share of the Portfolio’s net investment income, net realized capital gains and any other items of income, gain, loss, deduction or credit.
As of September 30, 2014, the Portfolio had no uncertain tax positions that would require financial statement recognition, de-recognition, or disclosure. The Portfolio 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 Expense Reduction — State Street Bank and Trust Company (SSBT) serves as custodian of the Portfolio. Pursuant to the custodian agreement, SSBT receives a fee reduced by credits, which are determined based on the average daily cash balance the Portfolio maintains with SSBT. All credit balances, if any, used to reduce the Portfolio’s custodian fees are reported as a reduction of expenses in the Statement of Operations.
F Use of Estimates — The preparation of the financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of income and expense during the reporting period. Actual results could differ from those estimates.
G Indemnifications — Under the Portfolio’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 Portfolio. Under Massachusetts law, if certain conditions prevail, interestholders in the Portfolio could
27 |
SMID-Cap Portfolio
Notes to Financial Statements — continued
be deemed to have personal liability for the obligations of the Portfolio. However, the Portfolio’s Declaration of Trust contains an express disclaimer of liability on the part of Portfolio interestholders and the By-laws provide that the Portfolio shall assume the defense on behalf of any Portfolio interestholder. Moreover, the By-laws also provide for indemnification out of Portfolio property of any interestholder held personally liable solely by reason of being or having been an interestholder for all loss or expense arising from such liability. Additionally, in the normal course of business, the Portfolio enters into agreements with service providers that may contain indemnification clauses. The Portfolio’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Portfolio that have not yet occurred.
2 Investment Adviser Fee and Other Transactions with Affiliates
The investment adviser fee is earned by Boston Management and Research (BMR), a subsidiary of EVM, as compensation for management and investment advisory services rendered to the Portfolio. Pursuant to the investment advisory agreement and subsequent fee reduction agreement between the Portfolio and BMR effective May 1, 2014, the fee is computed at an annual rate of 1.00% of the Portfolio’s average daily net assets up to $500 million, 0.9375% on net assets of $500 million but less than $1 billion, 0.875% on net assets of $1 billion but less than $2.5 billion, 0.8125% on net assets of $2.5 billion but less than $5 billion, 0.75% on net assets of $5 billion but less than $7.5 billion and 0.73% on net assets of $7.5 billion and over, and is payable monthly. The fee reduction cannot be terminated or reduced without the approval of a majority vote of the Trustees of the Portfolio who are not interested persons of BMR or the Portfolio and by the vote of a majority of the holders of interest in the Portfolio. For the year ended September 30, 2014, the Portfolio’s investment adviser fee amounted to $47,836,209 or 0.85% of the Portfolio’s average daily net assets. Pursuant to a sub-advisory agreement, BMR pays Atlanta Capital Management Company, LLC (Atlanta Capital), an affiliate of EVM, a portion of its adviser fee for sub-advisory services provided to the Portfolio. The Portfolio invests its cash in Cash Reserves Fund. EVM does not currently receive a fee for advisory services provided to Cash Reserves Fund.
Trustees and officers of the Portfolio who are members of EVM’s or BMR’s organizations receive remuneration for their services to the Portfolio out of the investment adviser fee. Trustees of the Portfolio who are not affiliated with the investment adviser 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 year ended September 30, 2014, no significant amounts have been deferred. Certain officers and Trustees of the Portfolio are officers of the above organizations.
3 Purchases and Sales of Investments
Purchases and sales of investments, other than short-term obligations, aggregated $799,267,057 and $585,470,402, respectively, for the year ended September 30, 2014.
4 Federal Income Tax Basis of Investments
The cost and unrealized appreciation (depreciation) of investments of the Portfolio at September 30, 2014, as determined on a federal income tax basis, were as follows:
Aggregate cost |
$ | 3,913,067,755 | ||
Gross unrealized appreciation |
$ | 1,569,602,358 | ||
Gross unrealized depreciation |
(5,937,986 | ) | ||
Net unrealized appreciation |
$ | 1,563,664,372 |
5 Line of Credit
The Portfolio participates with other portfolios and funds managed by EVM and its affiliates in a $750 million unsecured line of credit agreement with a group of banks. Borrowings are made by the Portfolio solely to facilitate the handling of unusual and/or unanticipated short-term cash requirements. Interest is charged to the Portfolio 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 0.08% 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 Portfolio, it may be unable to borrow some or all of its requested amounts at any particular time. The Portfolio did not have any significant borrowings or allocated fees during the year ended September 30, 2014.
28 |
SMID-Cap Portfolio
Notes to Financial Statements — continued
6 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.
ź | Level 1 – quoted prices in active markets for identical investments |
ź | Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.) |
ź | 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 September 30, 2014, the hierarchy of inputs used in valuing the Portfolio’s investments, which are carried at value, were as follows:
Asset Description | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Common Stocks |
$ | 5,345,942,905 | * | $ | — | $ | — | $ | 5,345,942,905 | |||||||
Short-Term Investments |
— | 130,789,222 | — | 130,789,222 | ||||||||||||
Total Investments |
$ | 5,345,942,905 | $ | 130,789,222 | $ | — | $ | 5,476,732,127 |
* | The level classification by major category of investments is the same as the category presentation in the Portfolio of Investments. |
The Portfolio held no investments or other financial instruments as of September 30, 2013 whose fair value was determined using Level 3 inputs. At September 30, 2014, there were no investments transferred between Level 1 and Level 2 during the year then ended.
29 |
SMID-Cap Portfolio
Report of Independent Registered Public Accounting Firm
To the Trustees and Investors of SMID-Cap Portfolio:
We have audited the accompanying statement of assets and liabilities of SMID-Cap Portfolio (the “Portfolio”), including the portfolio of investments, as of September 30, 2014, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the supplementary data for each of the five years in the period then ended. These financial statements and supplementary data are the responsibility of the Portfolio’s management. Our responsibility is to express an opinion on these financial statements and supplementary data based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and supplementary data are free of material misstatement. The Portfolio is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Portfolio’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of September 30, 2014, by correspondence with the custodian and brokers; where replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such financial statements and supplementary data referred to above present fairly, in all material respects, the financial position of SMID-Cap Portfolio as of September 30, 2014, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the supplementary data for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America.
DELOITTE & TOUCHE LLP
Boston, Massachusetts
30 |
Eaton Vance
Atlanta Capital SMID-Cap Fund
Special Meeting of Shareholders (Unaudited)
Eaton Vance Atlanta Capital SMID-Cap Fund
The Fund held a Special Meeting of Shareholders on May 29, 2014 to elect five Trustees. The results of the vote were as follows:
Number of Shares(1) | ||||||||
Nominee for Trustee | For | Withheld | ||||||
Scott E. Eston |
202,295,578 | 1,022,508 | ||||||
Cynthia E. Frost |
202,425,832 | 892,254 | ||||||
George J. Gorman |
202,330,182 | 987,904 | ||||||
Valerie A. Mosley |
202,448,101 | 869,985 | ||||||
Harriett Tee Taggart |
202,344,831 | 973,255 |
Each nominee was also elected a Trustee of the Portfolio.
(1) | Excludes fractional shares. |
SMID-Cap Portfolio
The Portfolio held a Special Meeting of Interestholders on May 29, 2014 to elect five Trustees. The results of the vote were as follows:
Interest in the Portfolio | ||||||||
Nominee for Trustee | For | Withheld | ||||||
Scott E. Eston |
99.50 | % | 0.50 | % | ||||
Cynthia E. Frost |
99.56 | % | 0.44 | % | ||||
George J. Gorman |
99.51 | % | 0.49 | % | ||||
Valerie A. Mosley |
99.57 | % | 0.43 | % | ||||
Harriett Tee Taggart |
99.52 | % | 0.48 | % |
31 |
Eaton Vance
Atlanta Capital SMID-Cap Fund
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 Eaton Vance group of mutual funds (the “Eaton Vance Funds”) held on April 28, 2014, the Board, including a majority of the Independent Trustees, voted to approve continuation of existing advisory and sub-advisory agreements for the Eaton Vance Funds for an additional one-year period. In voting its approval, the Board relied upon the affirmative recommendation of the Contract Review Committee of the Board, 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 2014, as well as information considered throughout the year at meetings of the Board and its committees. Such information included, among other things, the following:
Information about Fees, Performance and Expenses
ź | An independent report comparing the advisory and related fees paid by each fund with fees paid by comparable funds; |
ź | An independent report comparing each fund’s total expense ratio and its components to comparable funds; |
ź | An independent report 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; |
ź | Data regarding investment performance in comparison to benchmark indices and customized peer groups identified by the adviser in consultation with the Board; |
ź | 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; |
ź | Profitability analyses for each adviser with respect to each fund; |
Information about Portfolio Management and Trading
ź | Descriptions of the investment management services provided to each fund, including the investment strategies and processes employed, and any changes in portfolio management processes and personnel; |
ź | Information about the allocation of brokerage and the benefits received by each adviser as a result of brokerage allocation, including information concerning the acquisition of research through client commission arrangements and the fund’s policies with respect to “soft dollar” arrangements; |
ź | Data relating to portfolio turnover rates of each fund; |
ź | 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; |
ź | Information about each adviser’s processes for monitoring best execution of portfolio transactions, and other policies and practices of each adviser with respect to trading; |
Information about each Adviser
ź | Reports detailing the financial results and condition of each adviser; |
ź | Descriptions of the qualifications, education and experience of the individual investment professionals whose responsibilities include portfolio management and investment research for the funds, and information relating to their compensation and responsibilities with respect to managing other mutual funds and investment accounts; |
ź | Copies of the Codes of Ethics of each adviser and its affiliates, together with information relating to compliance with and the administration of such codes; |
ź | Copies of or descriptions of each adviser’s policies and procedures relating to proxy voting, the handling of corporate actions and class actions; |
ź | Information concerning the resources devoted to compliance efforts undertaken by each adviser and its affiliates on behalf of the funds (including descriptions of various compliance programs) and their record of compliance with investment policies and restrictions, including policies with respect to market-timing, late trading and selective portfolio disclosure, and with policies on personal securities transactions; |
ź | Descriptions of the business continuity and disaster recovery plans of each adviser and its affiliates; |
ź | 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; |
32 |
Eaton Vance
Atlanta Capital SMID-Cap Fund
Board of Trustees’ Contract Approval — continued
Other Relevant Information
ź | Information concerning the nature, cost and character of the administrative and other non-investment management services provided by Eaton Vance Management and its affiliates; |
ź | Information concerning management of the relationship with the custodian, subcustodians and fund accountants by each adviser or the funds’ administrator; and |
ź | The terms of each advisory agreement. |
Over the course of the twelve-month period ended April 30, 2014, with respect to one or more funds, the Board met nine 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, seventeen, eleven, six and ten times respectively. At such meetings, the Trustees participated in investment and performance reviews with the portfolio managers and other investment professionals of each adviser relating to each fund, and considered the investment and trading strategies used in pursuing each fund’s investment objective, including, where relevant, the use of derivative instruments, as well as processes for monitoring best execution of portfolio transactions and 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.
For funds that invest through one or more underlying portfolios, the Board considered similar information about the portfolio(s) when considering the approval of advisory agreements. In addition, in cases where the 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, legal counsel for the Independent Trustees. The members of the Contract Review Committee relied upon the advice of such counsel and their own business judgment in determining the material factors to be considered in evaluating each advisory and sub-advisory agreement and the weight to be given to each such factor. The conclusions reached with respect to each advisory and sub-advisory agreement were based on a comprehensive evaluation of all the information provided and not any single factor. Moreover, each member of the Contract Review Committee may have placed varying emphasis on particular factors in reaching conclusions with respect to each advisory and sub-advisory agreement. In evaluating each 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 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 agreement of SMID-Cap Portfolio (the “Portfolio”), the portfolio in which Eaton Vance Atlanta Capital SMID-Cap Fund (the “Fund”) invests, with Boston Management and Research (the “Adviser”), and the sub-advisory agreement with Atlanta Capital Management Company, LLC (the “Sub-adviser”), each an affiliate of Eaton Vance Management, including their fee structures, is in the interests of shareholders and, therefore, the Contract Review Committee recommended to the Board approval of each agreement. The Board accepted the recommendation of the Contract Review Committee as well as the factors considered and conclusions reached by the Contract Review Committee with respect to the agreements. Accordingly, the Board, including a majority of the Independent Trustees, voted to approve continuation of the investment advisory agreement and the sub-advisory agreement for the Portfolio.
Nature, Extent and Quality of Services
In considering whether to approve the investment advisory agreement and the sub-advisory agreement of the Portfolio, the Board evaluated the nature, extent and quality of services provided to the Portfolio 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 Portfolio, including the education, experience and number of its investment professionals and other personnel who provide portfolio management, investment research, and similar services to the Portfolio. With respect to the Adviser, the Board considered the Adviser’s responsibilities supervising the Sub-adviser. With respect to the Sub-adviser, the Board took into account the resources available to the Sub-adviser in fulfilling its duties under the sub-advisory agreement and the Sub-adviser’s experience in managing equity portfolios. The Board also took into account the resources dedicated to portfolio management and other services, including the compensation methods of the Adviser to recruit and retain investment personnel, and the time and attention devoted to the Portfolio by senior management.
The Board reviewed 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 personnel, selective disclosure of portfolio holdings, late trading, frequent trading, portfolio valuation, business continuity and the allocation of investment opportunities. The Board also evaluated the responses of the Adviser and its affiliates to requests in recent years from regulatory authorities such as the Securities and Exchange Commission and the Financial Industry Regulatory Authority.
33 |
Eaton Vance
Atlanta Capital SMID-Cap Fund
Board of Trustees’ Contract Approval — continued
The Board considered shareholder and other administrative services provided or managed by Eaton Vance Management and its affiliates, including transfer agency and accounting services. The Board evaluated the benefits to shareholders of investing in a fund that is a part of a large family of funds, including 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 agreement and the sub-advisory agreement.
Fund Performance
The Board compared the Fund’s investment performance to a relevant universe of comparable funds identified by an independent data provider and appropriate benchmark indices, as well as a customized peer group of similarly managed funds. The Board reviewed comparative performance data for the one-, three-, five- and ten-year periods ended September 30, 2013 for the Fund. The Board concluded that the performance of the Fund was satisfactory.
Management Fees and Expenses
The Board reviewed contractual fee rates for investment advisory and administrative services payable by the Portfolio and by the Fund (referred to as “management fees”). As part of its review, the Board considered the management fees and the Fund’s total expense ratio for the year ended September 30, 2013, as compared to a group of similarly managed funds selected by an independent data provider (the “peer group”). The Board noted that the Adviser had waived fees and/or paid expenses for the Fund. The Board considered the fact that, at the request of the Contract Review Committee, the Adviser had undertaken to permanently reduce fees of the Fund in an agreed upon amount, such reduction to be effective May 1, 2014. The Board also considered certain Fund specific factors that had an impact on Fund expense ratios relative to the peer group, as identified by management in response to inquiries from the Contract Review Committee. The Board also considered actions taken by management in recent years to reduce expenses at the fund complex level, including the negotiation of reduced fees for transfer agency and custody services.
After reviewing 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
The Board reviewed 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, to the Portfolio and to all Eaton Vance Funds as a group. The Board considered the level of profits realized without regard to revenue sharing or other payments by the Adviser and its affiliates to third parties in respect of distribution services. The Board also considered other direct or indirect benefits received by the Adviser and its affiliates, including the Sub-adviser, in connection with their relationships with the Fund and the Portfolio, 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 Portfolio 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 reasonable.
Economies of Scale
In reviewing management fees and profitability, the Board also considered the extent to which the Adviser and its affiliates, on the one hand, and the Fund and the Portfolio, on the other hand, can expect to realize benefits from economies of scale as the assets of the Fund and the Portfolio increase. The Board acknowledged the difficulty in accurately measuring the benefits resulting from the economies of scale with respect to the management of any specific fund or group of funds. The Board 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. 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, including new breakpoints effective May 1, 2014, will allow the Fund to continue to benefit from economies of scale in the future.
34 |
Eaton Vance
Atlanta Capital SMID-Cap Fund
Management and Organization
Fund Management. The Trustees of Eaton Vance Growth Trust (the Trust) and SMID-Cap Portfolio (the Portfolio) are responsible for the overall management and supervision of the Trust’s and Portfolio’s affairs. The Trustees and officers of the Trust and the Portfolio are listed below. Except as indicated, each individual has held the office shown or other offices in the same company for the last five years. Trustees and officers of the Trust and Portfolio hold indefinite terms of office. The “Noninterested Trustees” consist of those Trustees who are not “interested persons” of the Trust and the Portfolio, as that term is defined under the 1940 Act. The business address of each Trustee and officer is Two International Place, Boston, Massachusetts 02110. As used below, “EVC” refers to Eaton Vance Corp., “EV” refers to Eaton Vance, Inc., “EVM” refers to Eaton Vance Management, “BMR” refers to Boston Management and Research and “EVD” refers to Eaton Vance Distributors, Inc. EVC and EV are the corporate parent and trustee, respectively, of EVM and BMR. EVD is the Fund’s principal underwriter, the Portfolio’s placement agent and a wholly-owned subsidiary of EVC. Each officer affiliated with Eaton Vance may hold a position with other Eaton Vance affiliates that is comparable to his or her position with EVM listed below. Each Trustee oversees 182 portfolios in the Eaton Vance Complex (including all master and feeder funds in a master feeder structure). Each officer serves as an officer of certain other Eaton Vance funds. Each Trustee and officer serves until his or her successor is elected.
Name and Year of Birth | Position(s) with the Trust |
Trustee Since(1) |
Principal Occupation(s) and Directorships During Past Five Years and Other Relevant Experience | |||
Interested Trustee | ||||||
Thomas E. Faust Jr. 1958 |
Trustee of the Trust and Portfolio and President of the Portfolio | 2007 | Chairman, Chief Executive Officer and President of EVC, Director and President of EV, Chief Executive Officer and President of EVM and BMR, and Director of EVD. Trustee and/or officer of 182 registered investment companies. Mr. Faust is an interested person because of his positions with EVM, BMR, EVD, EVC and EV, which are affiliates of the Trust and the Portfolio. Directorships in the Last Five Years.(2) Director of EVC and Hexavest Inc. | |||
Noninterested Trustees | ||||||
Scott E. Eston 1956 |
Trustee | 2011 | Private investor. Formerly held various positions at Grantham, Mayo, Van Otterloo and Co., L.L.C. (investment management firm) (1997-2009), including Chief Operating Officer (2002-2009), Chief Financial Officer (1997-2009) and Chairman of the Executive Committee (2002-2008); President and Principal Executive Officer, GMO Trust (open-end registered investment company) (2006-2009). Former Partner, Coopers and Lybrand L.L.P. (now PricewaterhouseCoopers) (public accounting firm) (1987-1997). Directorships in the Last Five Years.(2) None. | |||
Cynthia E. Frost(3) 1961 |
Trustee | 2014 | Private investor. Formerly, Chief Investment Officer of Brown University (university endowment) (2000-2012); Portfolio Strategist for Duke Management Company (university endowment manager) (1995-2000); Managing Director, Cambridge Associates (1989-1995); Consultant, Bain and Company (1987-1989); Senior Equity Analyst, BA Investment Management Company (1983-1985). Directorships in the Last Five Years. None. | |||
George J. Gorman(3) 1952 |
Trustee | 2014 | Principal at George J. Gorman LLC (consulting firm). Formerly, Senior Partner at Ernst & Young LLP (public accounting firm) (1974-2009). Directorships in the Last Five Years. Formerly, Trustee of the Bank of America Money Market Funds Series Trust (2011-2014) and of the Ashmore Funds (2010-2014). | |||
Valerie A. Mosley(4) 1960 |
Trustee | 2014 | Chairwoman and Chief Executive Officer of Valmo Ventures (a consulting and investment firm). Former Partner and Senior Vice President, Portfolio Manager and Investment Strategist at Wellington Management Company, LLP (investment management firm) (1992-2012). Former Chief Investment Officer, PG Corbin Asset Management (1990-1992). Formerly worked in institutional corporate bond sales at Kidder Peabody (1986-1990). Directorships in the Last Five Years.(2) Director of Dynex Capital, Inc. (mortgage REIT) (since 2013). |
35 |
Eaton Vance
Atlanta Capital SMID-Cap Fund
Management and Organization — continued
Name and Year of Birth | Position(s) with the Trust |
Trustee Since(1) |
Principal Occupation(s) and Directorships During Past Five Years and Other Relevant Experience | |||
Noninterested Trustees (continued) | ||||||
William H. Park 1947 |
Trustee | 2003 | Consultant and private investor. Formerly, Chief Financial Officer, Aveon Group L.P. (investment management firm) (2010-2011). Formerly, Vice Chairman, Commercial Industrial Finance Corp. (specialty finance company) (2006-2010). Formerly, President and Chief Executive Officer, Prizm Capital Management, LLC (investment management firm) (2002-2005). Formerly, Executive Vice President and Chief Financial Officer, United Asset Management Corporation (investment management firm) (1982-2001). Formerly, Senior Manager, Price Waterhouse (now PricewaterhouseCoopers) (an independent registered public accounting firm) (1972-1981). Directorships in the Last Five Years.(2) None. | |||
Ronald A. Pearlman 1940 |
Trustee | 2003 | Lawyer and consultant. Formerly, Professor of Law, Georgetown University Law Center (1999-2014). Formerly, Partner, Covington & Burling LLP (law firm) (1991-2000). Formerly, Chief of Staff, Joint Committee on Taxation, U.S. Congress (1988-1990). Formerly, Deputy Assistant Secretary (Tax Policy) and Assistant Secretary (Tax Policy), U.S. Department of the Treasury (1983-1985). Directorships in the Last Five Years.(2) None. | |||
Helen Frame Peters 1948 |
Trustee | 2008 | Professor of Finance, Carroll School of Management, Boston College. Formerly, Dean, Carroll School of Management, Boston College (2000-2002). Formerly, Chief Investment Officer, Fixed Income, Scudder Kemper Investments (investment management firm) (1998-1999). Formerly, Chief Investment Officer, Equity and Fixed Income, Colonial Management Associates (investment management firm) (1991-1998). Directorships in the Last Five Years.(2) Formerly, Director of BJ’s Wholesale Club, Inc. (wholesale club retailer) (2004-2011). Formerly, Trustee of SPDR Index Shares Funds and SPDR Series Trust (exchange traded funds) (2000-2009). Formerly, Director of Federal Home Loan Bank of Boston (a bank for banks) (2007-2009). | |||
Harriett Tee Taggart 1948 |
Trustee | 2011 | Managing Director, Taggart Associates (a professional practice firm). Formerly, Partner and Senior Vice President, Wellington Management Company, LLP (investment management firm) (1983-2006). Directorships in the Last Five Years.(2) Director of Albemarle Corporation (chemicals manufacturer) (since 2007) and The Hanover Group (specialty property and casualty insurance company) (since 2009). Formerly, Director of Lubrizol Corporation (specialty chemicals) (2007-2011). | |||
Ralph F. Verni 1943 |
Chairman of the Board and Trustee |
2007 (Chairman) 2005 (Trustee) |
Consultant and private investor. Formerly, Chief Investment Officer (1982-1992), Chief Financial Officer (1988-1990) and Director (1982-1992), New England Life. Formerly, Chairperson, New England Mutual Funds (1982-1992). Formerly, President and Chief Executive Officer, State Street Management & Research (1992-2000). Formerly, Chairperson, State Street Research Mutual Funds (1992-2000). Formerly, Director, W.P. Carey, LLC (1998-2004) and First Pioneer Farm Credit Corp. (2002-2006). Directorships in the Last Five Years.(2) None. | |||
Principal Officers who are not Trustees | ||||||
Name and Year of Birth | Position(s) with the Trust and the Portfolio |
Officer Since(5) | Principal Occupation(s) During Past Five Years | |||
1956 |
President of the Trust | 2003 | Vice President and Chief Income Investment Officer of EVM and BMR. | |||
Maureen A. Gemma 1960 |
Vice President, Secretary and Chief Legal Officer | 2005 | Vice President of EVM and BMR. | |||
1967 |
Treasurer | 2007 | Vice President of EVM and BMR. | |||
Paul M. O’Neil 1953 |
Chief Compliance Officer | 2004 | Vice President of EVM and BMR. |
36 |
Eaton Vance
Atlanta Capital SMID-Cap Fund
Management and Organization — continued
(1) | Year first appointed to serve as Trustee for a fund in the Eaton Vance family of funds. Each Trustee has served continuously since appointment unless indicated otherwise. |
(2) | During their respective tenures, the Trustees (except for Ms. Frost and Mr. Gorman) also served as Board members of one or more of the following funds (which operated in the years noted): eUnitsTM 2 Year U.S. Market Participation Trust: Upside to Cap / Buffered Downside (launched in 2012 and terminated in 2014); eUnitsTM 2 Year U.S. Market Participation Trust II: Upside to Cap / Buffered Downside (launched in 2012 and terminated in 2014); Eaton Vance Credit Opportunities Fund (launched in 2005 and terminated in 2010); Eaton Vance Insured Florida Plus Municipal Bond Fund (launched in 2002 and terminated in 2009); and Eaton Vance National Municipal Income Trust (launched in 1998 and terminated in 2009). However, Ms. Mosley did not serve as a Board member of eUnitsTM 2 Year U.S. Market Participation Trust: Upside to Cap / Buffered Downside (launched in 2012 and terminated in 2014). |
(3) | Ms. Frost and Mr. Gorman began serving as Trustees effective May 29, 2014. |
(4) | Ms. Mosley began serving as a Trustee effective January 1, 2014. |
(5) | Year first elected to serve as officer of a fund in the Eaton Vance family of funds when the officer has served continuously. Otherwise, year of most recent election as an officer of a fund in the Eaton Vance family of funds. Titles may have changed since initial election. |
The SAI for the Fund includes additional information about the Trustees and officers of the Fund and the Portfolio and can be obtained without charge on Eaton Vance’s website at www.eatonvance.com or by calling 1-800-262-1122.
37 |
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:
ź | 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. |
ź | 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. |
ź | Policies and procedures (including physical, electronic and procedural safeguards) are in place that are designed to protect the confidentiality of such information. |
ź | 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’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 1-800-262-1122, or contact your financial advisor. Your instructions that householding not apply to delivery of your Eaton Vance documents will be effective within 30 days of receipt by Eaton Vance or your financial 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 1-800-262-1122 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 1-800-262-1122 and by accessing the SEC’s website at www.sec.gov.
38 |
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Investment Adviser of SMID-Cap Portfolio
Boston Management and Research
Two International Place
Sub-Adviser of SMID-Cap Portfolio
Atlanta Capital Management Company, LLC
1075 Peachtree Street NE
Suite 2100
Administrator of Eaton Vance Atlanta Capital SMID-Cap Fund
Eaton Vance Management
Two International Place
Principal Underwriter*
Eaton Vance Distributors, Inc.
Two International Place
(617) 482-8260
Custodian
State Street Bank and Trust Company
State Street Financial Center, One Lincoln Street
Transfer Agent
BNY Mellon Investment Servicing (US) Inc.
Attn: Eaton Vance Funds
P.O. Box 9653
Providence, RI 02940-9653
(800) 262-1122
Independent Registered Public Accounting Firm
Deloitte & Touche LLP
200 Berkeley Street
Boston, MA 02116-5022
Fund Offices
Two International Place
* | 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. |
1452 9.30.14 |
Eaton Vance
Atlanta Capital
Focused Growth Fund
Annual Report
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 1-800-262-1122.
Annual Report September 30, 2014
Eaton Vance
Atlanta Capital Focused Growth Fund
Management’s Discussion of Fund Performance |
2 | |||
Performance |
3 | |||
Fund Profile |
4 | |||
Endnotes and Additional Disclosures |
5 | |||
Fund Expenses |
6 | |||
Financial Statements |
7 | |||
Report of Independent Registered Public Accounting Firm |
20 | |||
Federal Tax Information |
21 | |||
Special Meeting of Shareholders |
22 | |||
Board of Trustees’ Contract Approval |
23 | |||
Management and Organization |
26 | |||
Important Notices |
29 |
Eaton Vance
Atlanta Capital Focused Growth Fund
Management’s Discussion of Fund Performance1
Economic and Market Conditions
U.S. stocks delivered solid gains for the 12-month period ended September 30, 2014. Beginning in the second half of October 2013, the market turned upward after a federal budget agreement ended the 16-day U.S. government shutdown. In December, when the U.S. Federal Reserve (the Fed) made its long-anticipated move to begin “tapering” economic stimulus, U.S. stocks put aside earlier fears of tapering and soared to record highs.
Harsh winter weather and geopolitical tensions weighed on the market in early 2014, but U.S. stocks subsequently resumed their advance amid signs of a gradually strengthening economy. The U.S. equity market generally climbed at a moderate pace through the spring of 2014, until the outbreak of hostilities in Iraq in June sent stocks sharply lower. But equities soon bounced back once the Fed reiterated its pledge to maintain low interest rates. U.S. stocks seesawed throughout the third quarter of 2014, falling in late July amid mounting geopolitical and economic concerns, before rebounding in August and into September, only to struggle again in the final couple weeks of the 12-month period.
However, the major U.S. stock indexes ended the 12-month period with strong performance. The S&P 500 Index2 advanced 19.73% for the period, while the Dow Jones Industrial Average gained 15.29%. The technology-laden NASDAQ Composite Index added 20.61%. Large-cap U.S. stocks (as measured by the Russell 1000 Index) generally fared better than their small-cap counterparts (as measured by the Russell 2000 Index) for the 12-month period. Within the large-cap space, growth stocks generally outpaced value stocks, while the reverse was true in the small-cap category.
Fund Performance
For the 12-month period ended September 30, 2014, Eaton Vance Atlanta Capital Focused Growth Fund (the Fund) had a total return of 16.61% for Class A shares at net asset value (NAV). By comparison, the Fund’s benchmark, the Russell 1000 Growth Index (the Index), returned 19.15% for the same period.
The Fund underperformed the Index due to stock selection. Sector allocation overall made a positive contribution to Fund performance versus the Index. Of the 10 economic sectors in the Index, the Fund achieved positive returns in all eight
sectors in which it was invested. The Index recorded positive returns in all 10 sectors.
The materials sector was the Fund’s worst-performing sector versus the Index, largely as a result of stock selection. Within the sector, the chemicals industry was a notable laggard, due primarily to the Fund’s holding in agricultural bioengineering company Monsanto Co., which underperformed amid concern about the impact of lower crop prices on demand for the company’s seed products. Stock selection in the consumer staples sector also hampered Fund performance relative to the Index. In particular, the Fund’s sole holding in the tobacco industry, Philip Morris International, Inc., lagged amid overseas tax and regulatory issues. Within the industrials sector, stock selection detracted from relative Fund performance. The Fund’s holdings in three industries — electrical equipment, road & rail and industrial conglomerates — notably underperformed during the period. In the electrical equipment industry, Eaton Corp., a leader in power management technology, was the Fund’s worst-performing individual stock for the 12-month period after the company’s earnings disappointed.
On the positive side, health care was the Fund’s top-performing sector relative to the Index, due to both stock selection and an overweight position. Within the sector, the Fund’s holdings in the biotechnology industry notably outperformed versus the Index. Biopharmaceutical firm Gilead Sciences, Inc. was the Fund’s best-performing individual stock, as the company launched a new drug for hepatitis C during the period. In the consumer discretionary sector, both stock selection and an underweight position contributed to the Fund’s performance relative to the Index. In the media industry, the Fund’s overweight in entertainment giant Walt Disney Co. aided relative performance, as the stock outperformed the overall Index. The Fund’s underweight in the specialty retail industry also boosted performance versus the Index, as the industry underperformed for the period. Stock selection and an overweight in the outperforming information technology sector also contributed to Fund performance relative to the Index, with search engine company Google, Inc. and smart-phone and computer maker Apple, Inc. among the individual stocks contributing to Fund performance for the
12-month period.
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 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 |
Eaton Vance
Atlanta Capital Focused Growth Fund
Performance2,3
Portfolio Managers Richard B. England, CFA and Paul J. Marshall, CFA, each of Atlanta Capital Management Company, LLC.
% Average Annual Total Returns | Class Inception Date |
Performance Inception Date |
One Year | Five Years | Ten Years | |||||||||||||||
Class A at NAV |
11/28/2003 | 04/30/2002 | 16.61 | % | 12.26 | % | 6.82 | % | ||||||||||||
Class A with 5.75% Maximum Sales Charge |
— | — | 9.87 | 10.93 | 6.19 | |||||||||||||||
Class C at NAV |
05/02/2011 | 04/30/2002 | 15.61 | 11.69 | 6.55 | |||||||||||||||
Class C with 1% Maximum Sales Charge |
— | — | 14.61 | 11.69 | 6.55 | |||||||||||||||
Class I at NAV |
04/30/2002 | 04/30/2002 | 16.85 | 12.53 | 7.07 | |||||||||||||||
Russell 1000 Growth Index |
— | — | 19.15 | % | 16.49 | % | 8.93 | % | ||||||||||||
% Total Annual Operating Expense Ratios4 | Class A | Class C | Class I | |||||||||||||||||
1.12 | % | 1.87 | % | 0.87 | % |
Growth of $10,000
This graph shows the change in value of a hypothetical investment of $10,000 in Class A of the Fund for the period indicated. For comparison, the same investment is shown in the indicated index.
Growth of Investment | Amount Invested | Period Beginning | At NAV | With Maximum Sales Charge | ||||||||||||
Class C |
$ | 10,000 | 09/30/2004 | $ | 18,863 | N.A. | ||||||||||
Class I |
$ | 250,000 | 09/30/2004 | $ | 495,328 | N.A. |
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 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.
3 |
Eaton Vance
Atlanta Capital Focused Growth Fund
Fund Profile
Sector Allocation (% of net assets)5
Top 10 Holdings (% of net assets)5
Apple, Inc. |
7.2 | % | ||
Gilead Sciences, Inc. |
7.1 | |||
Monsanto Co. |
6.7 | |||
Schlumberger, Ltd. |
5.4 | |||
Philip Morris International, Inc. |
4.6 | |||
Costco Wholesale Corp. |
4.4 | |||
Starbucks Corp. |
4.0 | |||
QUALCOMM, Inc. |
3.7 | |||
Danaher Corp. |
3.3 | |||
Lowe’s Companies, Inc. |
3.1 | |||
Total |
49.5 | % |
See Endnotes and Additional Disclosures in this report.
4 |
Eaton Vance
Atlanta Capital Focused Growth Fund
Endnotes and Additional Disclosures
1 | The views expressed in this report are those of the portfolio manager(s) and are current only through the date stated at the top of this page. These views are subject to change at any time based upon market or other conditions, and Eaton Vance and the Fund(s) disclaim any responsibility to update such views. These views may not be relied upon as investment advice and, because investment decisions are based on many factors, may not be relied upon as an indication of trading intent on behalf of any Eaton Vance fund. This commentary may contain statements that are not historical facts, referred to as “forward looking statements”. The Fund’s actual future results may differ significantly from those stated in any forward looking statement, depending on factors such as changes in securities or financial markets or general economic conditions, the volume of sales and purchases of Fund shares, the continuation of investment advisory, administrative and service contracts, and other risks discussed from time to time in the Fund’s filings with the Securities and Exchange Commission. |
2 | S&P 500 Index is an unmanaged index of large-cap stocks commonly used as a measure of U.S. stock market performance. Dow Jones Industrial Average is a price-weighted average of 30 blue-chip stocks that are generally the leaders in their industry. NASDAQ Composite Index is a market capitalization-weighted index of all domestic and international securities listed on NASDAQ. Russell 1000 Index is an unmanaged index of 1,000 U.S. large-cap stocks. Russell 2000 Index is an unmanaged index of 2,000 U.S. small-cap stocks. Russell 1000 Growth Index is an unmanaged index of U.S. large-cap growth 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. |
3 | 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 prior to the inception date of a class may be linked to the performance of an older class of the Fund. This linked performance is adjusted for any applicable sales charge, but is not adjusted for class expense differences. If adjusted for such differences, the performance would be different. Performance presented in the financial highlights included in the financial statements is not linked. In the performance table, the performance of Class C is linked to Class A. Performance since inception for an index, if presented, is the performance since the Fund’s or oldest share class’ inception, as applicable. |
4 | Source: Fund prospectus. |
5 | Excludes cash and cash equivalents. |
Fund profile subject to change due to active management. |
5 |
Eaton Vance
Atlanta Capital Focused Growth Fund
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 (April 1, 2014 – September 30, 2014).
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 (4/1/14) |
Ending Account Value (9/30/14) |
Expenses Paid (4/1/14 – 9/30/14) |
Annualized Expense Ratio |
|||||||||||||||
Actual |
|
|||||||||||||||||
Class A |
$ | 1,000.00 | $ | 1,038.90 | $ | 5.52 | 1.08 | % | ||||||||||
Class C |
$ | 1,000.00 | $ | 1,034.00 | $ | 9.33 | 1.83 | % | ||||||||||
Class I |
$ | 1,000.00 | $ | 1,039.60 | $ | 4.24 | 0.83 | % | ||||||||||
Hypothetical |
|
|||||||||||||||||
(5% return per year before expenses) |
|
|||||||||||||||||
Class A |
$ | 1,000.00 | $ | 1,019.70 | $ | 5.47 | 1.08 | % | ||||||||||
Class C |
$ | 1,000.00 | $ | 1,015.90 | $ | 9.25 | 1.83 | % | ||||||||||
Class I |
$ | 1,000.00 | $ | 1,020.90 | $ | 4.20 | 0.83 | % |
* | 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 183/365 (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 March 31, 2014. |
6 |
Eaton Vance
Atlanta Capital Focused Growth Fund
Portfolio of Investments
Common Stocks — 98.5% | ||||||||
Security | Shares | Value | ||||||
Biotechnology — 9.3% |
| |||||||
Celgene Corp.(1) |
43,164 | $ | 4,091,084 | |||||
Gilead Sciences, Inc.(1) |
121,980 | 12,984,771 | ||||||
$ | 17,075,855 | |||||||
Capital Markets — 1.0% |
| |||||||
T. Rowe Price Group, Inc. |
23,531 | $ | 1,844,830 | |||||
$ | 1,844,830 | |||||||
Chemicals — 8.5% |
| |||||||
Monsanto Co. |
110,155 | $ | 12,393,539 | |||||
Praxair, Inc. |
24,818 | 3,201,522 | ||||||
$ | 15,595,061 | |||||||
Communications Equipment — 5.7% |
| |||||||
Juniper Networks, Inc. |
164,442 | $ | 3,642,390 | |||||
QUALCOMM, Inc. |
91,169 | 6,816,706 | ||||||
$ | 10,459,096 | |||||||
Diversified Financial Services — 3.0% |
| |||||||
Intercontinental Exchange, Inc. |
28,529 | $ | 5,564,582 | |||||
$ | 5,564,582 | |||||||
Electrical Equipment — 2.6% |
| |||||||
Eaton Corp. PLC |
75,462 | $ | 4,782,027 | |||||
$ | 4,782,027 | |||||||
Energy Equipment & Services — 5.4% |
| |||||||
Schlumberger, Ltd. |
98,220 | $ | 9,987,992 | |||||
$ | 9,987,992 | |||||||
Food & Staples Retailing — 4.4% |
| |||||||
Costco Wholesale Corp. |
65,431 | $ | 8,199,813 | |||||
$ | 8,199,813 | |||||||
Health Care Providers & Services — 2.8% |
| |||||||
Express Scripts Holding Co.(1) |
73,773 | $ | 5,210,587 | |||||
$ | 5,210,587 | |||||||
Hotels, Restaurants & Leisure — 4.0% |
| |||||||
Starbucks Corp. |
98,099 | $ | 7,402,551 | |||||
$ | 7,402,551 | |||||||
Security | Shares | Value | ||||||
Industrial Conglomerates — 3.3% |
| |||||||
Danaher Corp. |
79,528 | $ | 6,042,537 | |||||
$ | 6,042,537 | |||||||
Internet & Catalog Retail — 4.5% |
| |||||||
Amazon.com, Inc.(1) |
11,404 | $ | 3,677,106 | |||||
Priceline Group, Inc. (The)(1) |
3,925 | 4,547,426 | ||||||
$ | 8,224,532 | |||||||
Internet Software & Services — 8.4% |
| |||||||
eBay, Inc.(1) |
80,427 | $ | 4,554,581 | |||||
Google, Inc., Class A(1) |
9,406 | 5,534,585 | ||||||
Google, Inc., Class C(1) |
9,406 | 5,430,648 | ||||||
$ | 15,519,814 | |||||||
IT Services — 3.1% |
| |||||||
Visa, Inc., Class A |
26,456 | $ | 5,644,917 | |||||
$ | 5,644,917 | |||||||
Media — 2.9% |
| |||||||
Twenty-First Century Fox, Inc., Class A |
157,976 | $ | 5,416,997 | |||||
$ | 5,416,997 | |||||||
Pharmaceuticals — 5.3% |
| |||||||
Bristol-Myers Squibb Co. |
86,787 | $ | 4,441,758 | |||||
Perrigo Co. PLC |
34,904 | 5,242,232 | ||||||
$ | 9,683,990 | |||||||
Road & Rail — 1.6% |
| |||||||
Genesee & Wyoming, Inc., Class A(1) |
30,182 | $ | 2,876,646 | |||||
$ | 2,876,646 | |||||||
Semiconductors & Semiconductor Equipment — 2.8% |
| |||||||
Texas Instruments, Inc. |
109,319 | $ | 5,213,423 | |||||
$ | 5,213,423 | |||||||
Software — 1.8% |
| |||||||
VMware, Inc., Class A(1) |
34,592 | $ | 3,246,113 | |||||
$ | 3,246,113 | |||||||
Specialty Retail — 3.1% |
| |||||||
Lowe’s Companies, Inc. |
109,133 | $ | 5,775,318 | |||||
$ | 5,775,318 | |||||||
7 | See Notes to Financial Statements. |
Eaton Vance
Atlanta Capital Focused Growth Fund
Portfolio of Investments — continued
Security | Shares | Value | ||||||
Technology Hardware, Storage & Peripherals — 9.2% |
| |||||||
Apple, Inc. |
132,241 | $ | 13,323,281 | |||||
EMC Corp. |
123,258 | 3,606,529 | ||||||
$ | 16,929,810 | |||||||
Textiles, Apparel & Luxury Goods — 1.2% |
| |||||||
Michael Kors Holdings, Ltd.(1) |
31,291 | $ | 2,233,865 | |||||
$ | 2,233,865 | |||||||
Tobacco — 4.6% |
| |||||||
Philip Morris International, Inc. |
100,978 | $ | 8,421,566 | |||||
$ | 8,421,566 | |||||||
Total Common Stocks |
|
$ | 181,351,922 | |||||
Short-Term Investments — 1.0% | ||||||||
Description | Interest (000’s omitted) |
Value | ||||||
Eaton Vance Cash Reserves Fund, LLC, 0.14%(2) |
$ | 1,807 | $ | 1,806,813 | ||||
Total Short-Term Investments |
$ | 1,806,813 | ||||||
Total Investments — 99.5% |
$ | 183,158,735 | ||||||
Other Assets, Less Liabilities — 0.5% |
$ | 945,508 | ||||||
Net Assets — 100.0% |
$ | 184,104,243 | ||||||
The percentage shown for each investment category in the Portfolio of Investments is based on net assets.
(1) | Non-income producing security. |
(2) | 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 September 30, 2014. |
8 | See Notes to Financial Statements. |
Eaton Vance
Atlanta Capital Focused Growth Fund
Statement of Assets and Liabilities
Assets | September 30, 2014 | |||
Unaffiliated investments, at value (identified cost, $134,366,330) |
$ | 181,351,922 | ||
Affiliated investment, at value (identified cost, $1,806,813) |
1,806,813 | |||
Dividends receivable |
184,285 | |||
Interest receivable from affiliated investment |
148 | |||
Receivable for Fund shares sold |
1,765,360 | |||
Total assets |
$ | 185,108,528 | ||
Liabilities | ||||
Payable for Fund shares redeemed |
$ | 801,501 | ||
Payable to affiliates: |
||||
Investment adviser fee |
100,695 | |||
Distribution and service fees |
21,036 | |||
Accrued expenses |
81,053 | |||
Total liabilities |
$ | 1,004,285 | ||
Net Assets |
$ | 184,104,243 | ||
Sources of Net Assets | ||||
Paid-in capital |
$ | 125,465,110 | ||
Accumulated net realized gain |
11,327,765 | |||
Accumulated undistributed net investment income |
325,776 | |||
Net unrealized appreciation |
46,985,592 | |||
Total |
$ | 184,104,243 | ||
Class A Shares | ||||
Net Assets |
$ | 84,938,457 | ||
Shares Outstanding |
5,585,657 | |||
Net Asset Value and Redemption Price Per Share |
||||
(net assets ÷ shares of beneficial interest outstanding) |
$ | 15.21 | ||
Maximum Offering Price Per Share |
||||
(100 ÷ 94.25 of net asset value per share) |
$ | 16.14 | ||
Class C Shares | ||||
Net Assets |
$ | 3,961,670 | ||
Shares Outstanding |
265,799 | |||
Net Asset Value and Offering Price Per Share* |
||||
(net assets ÷ shares of beneficial interest outstanding) |
$ | 14.90 | ||
Class I Shares | ||||
Net Assets |
$ | 95,204,116 | ||
Shares Outstanding |
6,598,634 | |||
Net Asset Value, Offering Price and Redemption Price Per Share |
||||
(net assets ÷ shares of beneficial interest outstanding) |
$ | 14.43 |
On sales of $50,000 or more, the offering price of Class A shares is reduced.
* | Redemption price per share is equal to the net asset value less any applicable contingent deferred sales charge. |
9 | See Notes to Financial Statements. |
Eaton Vance
Atlanta Capital Focused Growth Fund
Statement of Operations
Investment Income | Year Ended |
|||
Dividends |
$ | 2,318,949 | ||
Interest allocated from affiliated investment |
7,054 | |||
Expenses allocated from affiliated investment |
(945 | ) | ||
Total investment income |
$ | 2,325,058 | ||
Expenses | ||||
Investment adviser fee |
$ | 1,191,974 | ||
Distribution and service fees |
||||
Class A |
202,980 | |||
Class C |
40,284 | |||
Trustees’ fees and expenses |
8,636 | |||
Custodian fee |
60,059 | |||
Transfer and dividend disbursing agent fees |
137,986 | |||
Legal and accounting services |
36,818 | |||
Printing and postage |
29,829 | |||
Registration fees |
36,044 | |||
Miscellaneous |
17,492 | |||
Total expenses |
$ | 1,762,102 | ||
Net investment income |
$ | 562,956 | ||
Realized and Unrealized Gain (Loss) | ||||
Net realized gain (loss) — |
||||
Investment transactions |
$ | 18,080,346 | ||
Investment transactions allocated from affiliated investment |
69 | |||
Net realized gain |
$ | 18,080,415 | ||
Change in unrealized appreciation (depreciation) — |
||||
Investments |
$ | 9,013,141 | ||
Net change in unrealized appreciation (depreciation) |
$ | 9,013,141 | ||
Net realized and unrealized gain |
$ | 27,093,556 | ||
Net increase in net assets from operations |
$ | 27,656,512 |
10 | See Notes to Financial Statements. |
Eaton Vance
Atlanta Capital Focused Growth Fund
Statements of Changes in Net Assets
Year Ended September 30, | ||||||||
Increase (Decrease) in Net Assets | 2014 | 2013 | ||||||
From operations — |
||||||||
Net investment income |
$ | 562,956 | $ | 731,417 | ||||
Net realized gain from investment and foreign currency transactions |
18,080,415 | 607,257 | ||||||
Net change in unrealized appreciation (depreciation) from investments |
9,013,141 | 18,711,398 | ||||||
Net increase in net assets from operations |
$ | 27,656,512 | $ | 20,050,072 | ||||
Distributions to shareholders — |
||||||||
From net investment income |
||||||||
Class A |
$ | (139,084 | ) | $ | — | |||
Class I |
(402,924 | ) | (82,840 | ) | ||||
From net realized gain |
||||||||
Class A |
(1,673,236 | ) | — | |||||
Class C |
(75,645 | ) | — | |||||
Class I |
(2,026,793 | ) | — | |||||
Total distributions to shareholders |
$ | (4,317,682 | ) | $ | (82,840 | ) | ||
Transactions in shares of beneficial interest — |
||||||||
Proceeds from sale of shares |
||||||||
Class A |
$ | 27,248,325 | $ | 26,789,934 | ||||
Class C |
778,236 | 1,282,295 | ||||||
Class I |
37,719,987 | 35,216,353 | ||||||
Net asset value of shares issued to shareholders in payment of distributions declared |
||||||||
Class A |
1,689,200 | — | ||||||
Class C |
58,742 | — | ||||||
Class I |
2,322,357 | 77,995 | ||||||
Cost of shares redeemed |
||||||||
Class A |
(33,902,715 | ) | (25,435,687 | ) | ||||
Class C |
(1,158,147 | ) | (1,333,917 | ) | ||||
Class I |
(48,640,485 | ) | (59,976,884 | ) | ||||
Net decrease in net assets from Fund share transactions |
$ | (13,884,500 | ) | $ | (23,379,911 | ) | ||
Net increase (decrease) in net assets |
$ | 9,454,330 | $ | (3,412,679 | ) | |||
Net Assets | ||||||||
At beginning of year |
$ | 174,649,913 | $ | 178,062,592 | ||||
At end of year |
$ | 184,104,243 | $ | 174,649,913 | ||||
Accumulated undistributed net investment income included in net assets |
| |||||||
At end of year |
$ | 325,776 | $ | 467,265 |
11 | See Notes to Financial Statements. |
Eaton Vance
Atlanta Capital Focused Growth Fund
Financial Highlights
Class A | ||||||||||||||||||||
Year Ended September 30, | ||||||||||||||||||||
2014 | 2013 | 2012 | 2011 | 2010 | ||||||||||||||||
Net asset value — Beginning of year |
$ | 13.360 | $ | 12.000 | $ | 9.770 | $ | 9.540 | $ | 8.780 | ||||||||||
Income (Loss) From Operations | ||||||||||||||||||||
Net investment income (loss)(1) |
$ | 0.028 | $ | 0.035 | $ | (0.038 | ) | $ | (0.065 | ) | $ | (0.026 | ) | |||||||
Net realized and unrealized gain |
2.164 | 1.325 | 2.268 | 0.295 | 0.832 | |||||||||||||||
Total income from operations |
$ | 2.192 | $ | 1.360 | $ | 2.230 | $ | 0.230 | $ | 0.806 | ||||||||||
Less Distributions | ||||||||||||||||||||
From net investment income |
$ | (0.026 | ) | $ | — | $ | — | $ | — | $ | (0.046 | ) | ||||||||
From net realized gain |
(0.316 | ) | — | — | — | — | ||||||||||||||
Total distributions |
$ | (0.342 | ) | $ | — | $ | — | $ | — | $ | (0.046 | ) | ||||||||
Net asset value — End of year |
$ | 15.210 | $ | 13.360 | $ | 12.000 | $ | 9.770 | $ | 9.540 | ||||||||||
Total Return(2) |
16.61 | % | 11.33 | % | 22.82 | % | 2.41 | % | 9.21 | % | ||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||
Net assets, end of year (000’s omitted) |
$ | 84,938 | $ | 79,626 | $ | 69,679 | $ | 45,044 | $ | 8,706 | ||||||||||
Ratios (as a percentage of average daily net assets): |
||||||||||||||||||||
Expenses(3) |
1.08 | % | 1.12 | % | 1.17 | %(4) | 1.25 | %(4)(5) | 1.25 | %(4)(5) | ||||||||||
Net investment income (loss) |
0.19 | % | 0.28 | % | (0.34 | )% | (0.58 | )% | (0.29 | )% | ||||||||||
Portfolio Turnover of the Portfolio(6) |
— | — | 60 | %(7) | 62 | % | 152 | % | ||||||||||||
Portfolio Turnover of the Fund |
46 | % | 53 | % | 17 | %(7)(8) | — | — |
(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) | Excludes the effect of custody fee credits, if any, of less than 0.005%. |
(4) | Includes the Fund’s share of the Portfolio’s allocated expenses for the period while the Fund was investing in the Portfolio. |
(5) | The investment adviser of the Portfolio waived a portion of its investment adviser fee and/or the administrator of the Fund subsidized certain operating expenses (equal to 0.11% and 0.43% of average daily net assets for the years ended September 30, 2011 and 2010, respectively). A portion of the waiver and subsidy was borne by the sub-adviser of the Portfolio. Absent this waiver and subsidy, total return would be lower. |
(6) | Portfolio turnover represents the rate of portfolio activity for the period while the Fund was investing in the Portfolio. |
(7) | Not annualized. |
(8) | For the period from July 23, 2012 through September 30, 2012 when the Fund was making investments directly in securities. |
References to Portfolio herein are to Focused Growth Portfolio, a Massachusetts business trust having the same investment objective and policies as the Fund, in which the Fund invested all of its investable assets prior to July 23, 2012.
12 | See Notes to Financial Statements. |
Eaton Vance
Atlanta Capital Focused Growth Fund
Financial Highlights — continued
Class C | ||||||||||||||||
Year Ended September 30, | Period Ended |
|||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||
Net asset value — Beginning of period |
$ | 13.140 | $ | 11.880 | $ | 9.750 | $ | 11.920 | ||||||||
Income (Loss) From Operations | ||||||||||||||||
Net investment loss(2) |
$ | (0.080 | ) | $ | (0.058 | ) | $ | (0.121 | ) | $ | (0.067 | ) | ||||
Net realized and unrealized gain (loss) |
2.112 | 1.318 | 2.251 | (2.103 | ) | |||||||||||
Total income (loss) from operations |
$ | 2.032 | $ | 1.260 | $ | 2.130 | $ | (2.170 | ) | |||||||
Less Distributions | ||||||||||||||||
From net realized gain |
$ | (0.272 | ) | $ | — | $ | — | $ | — | |||||||
Total distributions |
$ | (0.272 | ) | $ | — | $ | — | $ | — | |||||||
Net asset value — End of period |
$ | 14.900 | $ | 13.140 | $ | 11.880 | $ | 9.750 | ||||||||
Total Return(3) |
15.61 | % | 10.61 | % | 21.85 | % | (18.20 | )%(4) | ||||||||
Ratios/Supplemental Data | ||||||||||||||||
Net assets, end of period (000’s omitted) |
$ | 3,962 | $ | 3,776 | $ | 3,443 | $ | 1,449 | ||||||||
Ratios (as a percentage of average daily net assets): |
||||||||||||||||
Expenses(5) |
1.83 | % | 1.87 | % | 1.91 | %(7) | 2.00 | %(6)(7)(8) | ||||||||
Net investment loss |
(0.55 | )% | (0.47 | )% | (1.08 | )% | (1.49 | )%(6) | ||||||||
Portfolio Turnover of the Portfolio(9) |
— | — | 60 | %(4) | 62 | %(10) | ||||||||||
Portfolio Turnover of the Fund |
46 | % | 53 | % | 17 | %(4)(11) | — |
(1) | For the period from the commencement of operations, May 2, 2011, to September 30, 2011. |
(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 and do not reflect the effect of sales charges. |
(4) | Not annualized. |
(5) | Excludes the effect of custody fee credits, if any, of less than 0.005%. |
(6) | Annualized. |
(7) | Includes the Fund’s share of the Portfolio’s allocated expenses for the period while the Fund was investing in the Portfolio. |
(8) | The administrator of the Fund subsidized certain operating expenses (equal to 0.11% of average daily net assets for the period ended September 30, 2011). A portion of the subsidy was borne by the sub-adviser of the Portfolio. Absent this subsidy, total return would be lower. |
(9) | Portfolio turnover represents the rate of portfolio activity for the period while the Fund was investing in the Portfolio. |
(10) | For the Portfolio’s year ended September 30, 2011. |
(11) | For the period from July 23, 2012 through September 30, 2012 when the Fund was making investments directly in securities. |
References to Portfolio herein are to Focused Growth Portfolio, a Massachusetts business trust having the same investment objective and policies as the Fund, in which the Fund invested all of its investable assets prior to July 23, 2012.
13 | See Notes to Financial Statements. |
Eaton Vance
Atlanta Capital Focused Growth Fund
Financial Highlights — continued
Class I | ||||||||||||||||||||
Year Ended September 30, | ||||||||||||||||||||
2014 | 2013 | 2012 | 2011 | 2010 | ||||||||||||||||
Net asset value — Beginning of year |
$ | 12.700 | $ | 11.380 | $ | 9.240 | $ | 9.010 | $ | 8.290 | ||||||||||
Income (Loss) From Operations | ||||||||||||||||||||
Net investment income (loss)(1) |
$ | 0.061 | $ | 0.063 | $ | (0.005 | ) | $ | (0.034 | ) | $ | (0.005 | ) | |||||||
Net realized and unrealized gain |
2.048 | 1.266 | 2.145 | 0.264 | 0.791 | |||||||||||||||
Total income from operations |
$ | 2.109 | $ | 1.329 | $ | 2.140 | $ | 0.230 | $ | 0.786 | ||||||||||
Less Distributions | ||||||||||||||||||||
From net investment income |
$ | (0.063 | ) | $ | (0.009 | ) | $ | — | $ | — | $ | (0.066 | ) | |||||||
From net realized gain |
(0.316 | ) | — | — | — | — | ||||||||||||||
Total distributions |
$ | (0.379 | ) | $ | (0.009 | ) | $ | — | $ | — | $ | (0.066 | ) | |||||||
Net asset value — End of year |
$ | 14.430 | $ | 12.700 | $ | 11.380 | $ | 9.240 | $ | 9.010 | ||||||||||
Total Return(2) |
16.85 | % | 11.69 | % | 23.16 | % | 2.55 | % | 9.51 | % | ||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||
Net assets, end of year (000’s omitted) |
$ | 95,204 | $ | 91,248 | $ | 104,941 | $ | 53,707 | $ | 21,275 | ||||||||||
Ratios (as a percentage of average daily net assets): |
||||||||||||||||||||
Expenses(3) |
0.83 | % | 0.87 | % | 0.92 | %(4) | 1.00 | %(4)(5) | 1.00 | %(4)(5) | ||||||||||
Net investment income (loss) |
0.44 | % | 0.53 | % | (0.04 | )% | (0.32 | )% | (0.06 | )% | ||||||||||
Portfolio Turnover of the Portfolio(6) |
— | — | 60 | %(7) | 62 | % | 152 | % | ||||||||||||
Portfolio Turnover of the Fund |
46 | % | 53 | % | 17 | %(7)(8) | — | — |
(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) | Excludes the effect of custody fee credits, if any, of less than 0.005%. |
(4) | Includes the Fund’s share of the Portfolio’s allocated expenses for the period while the Fund was investing in the Portfolio. |
(5) | The investment adviser of the Portfolio waived a portion of its investment adviser fee and/or the administrator of the Fund subsidized certain operating expenses (equal to 0.11% and 0.43% of average daily net assets for the years ended September 30, 2011 and 2010, respectively). A portion of the waiver and subsidy was borne by the sub-adviser of the Portfolio. Absent this waiver and subsidy, total return would be lower. |
(6) | Portfolio turnover represents the rate of portfolio activity for the period while the Fund was investing in the Portfolio. |
(7) | Not annualized. |
(8) | For the period from July 23, 2012 through September 30, 2012 when the Fund was making investments directly in securities. |
References to Portfolio herein are to Focused Growth Portfolio, a Massachusetts business trust having the same investment objective and policies as the Fund, in which the Fund invested all of its investable assets prior to July 23, 2012.
14 | See Notes to Financial Statements. |
Eaton Vance
Atlanta Capital Focused Growth Fund
Notes to Financial Statements
1 Significant Accounting Policies
Eaton Vance Atlanta Capital Focused Growth Fund (the Fund) is a non-diversified series of Eaton Vance Growth 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 to seek long-term capital growth. The Fund offers three classes of shares. Class A shares are generally sold subject to a sales charge imposed at time of purchase. Class C shares are sold at net asset value and are generally subject to a contingent deferred sales charge (see Note 5). Class I 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. 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.
Debt Obligations. Short-term obligations purchased with a remaining maturity of sixty days or less are generally valued at amortized cost, which approximates market value.
Foreign Currencies. Foreign currencies are valued in U.S. dollars, based on foreign currency exchange rate quotations supplied by a third party pricing service. The pricing service uses a proprietary model to determine the exchange rate. Inputs to the model include reported trades and implied bid/ask spreads.
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). The value of the Fund’s investment in Cash Reserves Fund reflects the Fund’s proportionate interest in its net assets. Cash Reserves Fund generally values its investment securities utilizing the amortized cost valuation technique in accordance with Rule 2a-7 under the 1940 Act. This technique involves initially valuing a portfolio security at its cost and thereafter assuming a constant amortization to maturity of any discount or premium. If amortized cost is determined not to approximate fair value, Cash Reserves Fund may value its investment securities based on available market quotations provided by a third party pricing service.
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. However, if the ex-dividend date has passed, certain dividends from foreign securities are recorded as the Fund is informed of the ex-dividend date. Withholding taxes on foreign dividends and capital gains have been provided for in accordance with the Fund’s understanding of the applicable countries’ tax rules and rates. Interest income is recorded on the basis of interest accrued, adjusted for amortization of premium or accretion of discount.
D Federal Taxes — The 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 September 30, 2014, 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.
15 |
Eaton Vance
Atlanta Capital Focused Growth Fund
Notes to Financial Statements — continued
F Expense Reduction — State Street Bank and Trust Company (SSBT) serves as custodian of the Fund. Pursuant to the custodian agreement, SSBT receives a fee reduced by credits, which are determined based on the average daily cash balance the Fund maintains with SSBT. All credit balances, if any, used to reduce the Fund’s custodian fees are reported as a reduction of expenses in the Statement of Operations.
G Foreign Currency Translation — Other assets and liabilities initially expressed in foreign currencies are translated each business day into U.S. dollars based upon current exchange rates. Income and expenses denominated in foreign currencies are translated into U.S. dollars based upon currency exchange rates in effect on the respective dates of such transactions.
H Use of Estimates — The preparation of the financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of income and expense during the reporting period. Actual results could differ from those estimates.
I 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 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.
2 Distributions to Shareholders
It is the present policy of the Fund to make at least one distribution annually (normally in December) 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. The Fund distinguishes between distributions on a tax basis and a financial reporting basis. Accounting principles generally accepted in the United States of America require that only distributions in excess of tax basis earnings and profits be reported in the financial statements as a return of capital. Permanent differences between book and tax accounting relating to distributions are reclassified to paid-in capital. For tax purposes, distributions from short-term capital gains are considered to be from ordinary income.
The tax character of distributions declared for the years ended September 30, 2014 and September 30, 2013 was as follows:
Year Ended September 30, | ||||||||
2014 | 2013 | |||||||
Distributions declared from: |
||||||||
Ordinary income |
$ | 1,063,567 | $ | 82,840 | ||||
Long-term capital gains |
$ | 3,254,115 | $ | — |
During the year ended September 30, 2014, accumulated net realized gain was decreased by $2,328,967, accumulated undistributed net investment income was decreased by $162,437 and paid-in capital was increased by $2,491,404 due to the Fund’s use of equalization accounting and differences between book and tax accounting, primarily for investments in partnerships. Tax equalization accounting allows the Fund to treat as a distribution that portion of redemption proceeds representing a redeeming shareholder’s portion of undistributed taxable income and net capital gains. These reclassifications had no effect on the net assets or net asset value per share of the Fund.
As of September 30, 2014, the components of distributable earnings (accumulated losses) and unrealized appreciation (depreciation) on a tax basis were as follows:
Undistributed ordinary income |
$ | 3,196,965 | ||
Undistributed long-term capital gains |
$ | 8,999,925 | ||
Net unrealized appreciation |
$ | 46,442,243 |
The differences between components of distributable earnings (accumulated losses) on a tax basis and the amounts reflected in the Statement of Assets and Liabilities are primarily due to wash sales, investments in partnerships and the tax treatment of short-term capital gains.
16 |
Eaton Vance
Atlanta Capital Focused Growth Fund
Notes to Financial Statements — continued
3 Investment Adviser Fee and Other Transactions with Affiliates
The investment adviser fee is earned by Boston Management and Research (BMR), a subsidiary of EVM, as compensation for management and investment advisory services rendered to the Fund. The fee is computed at an annual rate of 0.65% of the Fund’s average daily net assets up to $500 million and is payable monthly. On net assets of $500 million and over, the annual fee is reduced. For the year ended September 30, 2014, the investment adviser fee amounted to $1,191,974 or 0.65% of the Fund’s average daily net assets. Pursuant to a sub-advisory agreement, BMR pays Atlanta Capital Management Company, LLC (Atlanta Capital), an affiliate of EVM, a portion of its adviser 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 serves as the administrator to the Fund, but receives no compensation. EVM provides sub-transfer agency and related services to the Fund pursuant to a Sub-Transfer Agency Support Services Agreement. For the year ended September 30, 2014, EVM earned $16,568 from the Fund pursuant to such agreement, which is included in transfer and dividend disbursing agent fees on the Statement of Operations. The Fund was informed that Eaton Vance Distributors, Inc. (EVD), an affiliate of EVM and the Fund’s principal underwriter, received $11,818 as its portion of the sales charge on sales of Class A shares for the year ended September 30, 2014. EVD also received distribution and service fees from Class A and Class C shares (see Note 4) and contingent deferred sales charges (see Note 5).
Trustees and officers of the Fund who are members of EVM’s or BMR’s organizations receive remuneration for their services to the Fund out of the investment adviser fee. Trustees of the Fund who are not affiliated with the investment adviser and administrator 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 year ended September 30, 2014, no significant amounts have been deferred. Certain officers and Trustees of the Fund are officers of the above organizations.
4 Distribution Plans
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 year ended September 30, 2014 amounted to $202,980 for Class A shares.
The Fund also has in effect a distribution plan for Class C shares (Class C Plan) pursuant to Rule 12b-1 under the 1940 Act. Pursuant to the Class C Plan, the Fund pays EVD amounts equal to 0.75% per annum of its average daily net assets attributable to Class C shares for providing ongoing distribution services and facilities to the Fund. For the year ended September 30, 2014, the Fund paid or accrued to EVD $30,213 for Class C shares.
Pursuant to the Class C Plan, the Fund also makes payments of service fees to EVD, financial intermediaries and other persons in amounts equal to 0.25% per annum of its average daily net assets attributable to that class. Service fees paid or accrued are for personal services and/or the maintenance of shareholder accounts. They are separate and distinct from the sales commissions and distribution fees payable to EVD. Service fees paid or accrued for the year ended September 30, 2014 amounted to $10,071 for Class C shares.
Distribution and service fees are subject to the limitations contained in the Financial Industry Regulatory Authority’s NASD Conduct Rule 2830(d).
5 Contingent Deferred Sales Charges
A contingent deferred sales charge (CDSC) of 1% generally is imposed on redemptions of Class C shares made within one year of purchase. Class A shares may be subject to a 1% CDSC if redeemed within 18 months of purchase (depending on the circumstances of purchase). 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 year ended September 30, 2014, the Fund was informed that EVD received approximately $2,000 of CDSCs paid by Class A shareholders and no CDSCs paid by Class C shareholders.
6 Purchases and Sales of Investments
Purchases and sales of investments, other than short-term obligations, aggregated $81,428,585 and $98,568,964, respectively, for the year ended September 30, 2014.
17 |
Eaton Vance
Atlanta Capital Focused Growth Fund
Notes to Financial Statements — 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:
Year Ended September 30, | ||||||||
Class A | 2014 | 2013 | ||||||
Sales |
1,845,467 | 2,174,469 | ||||||
Issued to shareholders electing to receive payments of distributions in Fund shares |
119,717 | — | ||||||
Redemptions |
(2,337,629 | ) | (2,023,389 | ) | ||||
Net increase (decrease) |
(372,445 | ) | 151,080 | |||||
Year Ended September 30, | ||||||||
Class C | 2014 | 2013 | ||||||
Sales |
54,682 | 105,345 | ||||||
Issued to shareholders electing to receive payments of distributions in Fund shares |
4,223 | — | ||||||
Redemptions |
(80,576 | ) | (107,585 | ) | ||||
Net decrease |
(21,671 | ) | (2,240 | ) | ||||
Year Ended September 30, | ||||||||
Class I | 2014 | 2013 | ||||||
Sales |
2,706,294 | 2,954,356 | ||||||
Issued to shareholders electing to receive payments of distributions in Fund shares |
173,829 | 6,952 | ||||||
Redemptions |
(3,466,769 | ) | (4,995,068 | ) | ||||
Net decrease |
(586,646 | ) | (2,033,760 | ) |
8 Federal Income Tax Basis of Investments
The cost and unrealized appreciation (depreciation) of investments of the Fund at September 30, 2014, as determined on a federal income tax basis, were as follows:
Aggregate cost |
$ | 136,716,492 | ||
Gross unrealized appreciation |
$ | 48,465,538 | ||
Gross unrealized depreciation |
(2,023,295 | ) | ||
Net unrealized appreciation |
$ | 46,442,243 |
9 Line of Credit
The Fund participates with other portfolios and funds managed by EVM and its affiliates in a $750 million unsecured line of credit agreement with a group of banks. 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 0.08% 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 year ended September 30, 2014.
18 |
Eaton Vance
Atlanta Capital Focused Growth Fund
Notes to Financial Statements — continued
10 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.
ź | Level 1 – quoted prices in active markets for identical investments |
ź | Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.) |
ź | 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 September 30, 2014, 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 |
$ | 181,351,922 | * | $ | — | $ | — | $ | 181,351,922 | |||||||
Short-Term Investments |
— | 1,806,813 | — | 1,806,813 | ||||||||||||
Total Investments |
$ | 181,351,922 | $ | 1,806,813 | $ | — | $ | 183,158,735 |
* | The level classification by major category of investments is the same as the category presentation in the Portfolio of Investments. |
The Fund held no investments or other financial instruments as of September 30, 2013 whose fair value was determined using Level 3 inputs. At September 30, 2014, there were no investments transferred between Level 1 and Level 2 during the year then ended.
19 |
Eaton Vance
Atlanta Capital Focused Growth Fund
Report of Independent Registered Public Accounting Firm
To the Trustees of Eaton Vance Growth Trust and Shareholders of Eaton Vance Atlanta Capital Focused Growth Fund:
We have audited the accompanying statement of assets and liabilities of Eaton Vance Atlanta Capital Focused Growth Fund (the “Fund”) (one of the funds constituting Eaton Vance Growth Trust), including the portfolio of investments, as of September 30, 2014, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the periods presented. These financial statements and financial highlights are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. The Fund is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Fund’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of September 30, 2014, by correspondence with the custodian and brokers; where replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Eaton Vance Atlanta Capital Focused Growth Fund as of September 30, 2014, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the periods presented, in conformity with accounting principles generally accepted in the United States of America.
DELOITTE & TOUCHE LLP
Boston, Massachusetts
20 |
Eaton Vance
Atlanta Capital Focused Growth Fund
Federal Tax Information (Unaudited)
The Form 1099-DIV you receive in February 2015 will show the tax status of all distributions paid to your account in calendar year 2014. Shareholders are advised to consult their own tax adviser with respect to the tax consequences of their investment in the Fund. As required by the Internal Revenue Code and/or regulations, shareholders must be notified regarding the status of qualified dividend income for individuals, the dividends received deduction for corporations and capital gains dividends.
Qualified Dividend Income. For the fiscal year ended September 30, 2014, the Fund designates approximately $2,141,267, or up to the maximum amount of such dividends allowable pursuant to the Internal Revenue Code, as qualified dividend income eligible for the reduced tax rate of 15%.
Dividends Received Deduction. Corporate shareholders are generally entitled to take the dividends received deduction on the portion of the Fund’s dividend distribution that qualifies under tax law. For the Fund’s fiscal 2014 ordinary income dividends, 64.06% qualifies for the corporate dividends received deduction.
Capital Gains Dividends. The Fund hereby designates as a capital gain dividend with respect to the taxable year ended September 30, 2014, $13,830,673 or, if subsequently determined to be different, the net capital gain of such year.
21 |
Eaton Vance
Atlanta Capital Focused Growth Fund
Special Meeting of Shareholders (Unaudited)
The Fund held a Special Meeting of Shareholders on May 29, 2014 to elect five Trustees. The results of the vote were as follows:
Nominee for Trustee | Number of Shares(1) | |||||||
For | Withheld | |||||||
Scott E. Eston |
12,488,559 | 28,608 | ||||||
Cynthia E. Frost |
12,511,138 | 6,029 | ||||||
George J. Gorman |
12,508,387 | 8,779 | ||||||
Valerie A. Mosley |
12,511,138 | 6,029 | ||||||
Harriett Tee Taggart |
12,491,309 | 25,858 |
(1) | Excludes fractional shares. |
22 |
Eaton Vance
Atlanta Capital Focused Growth Fund
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 Eaton Vance group of mutual funds (the “Eaton Vance Funds”) held on April 28, 2014, the Board, including a majority of the Independent Trustees, voted to approve continuation of existing advisory and sub-advisory agreements for the Eaton Vance Funds for an additional one-year period. In voting its approval, the Board relied upon the affirmative recommendation of the Contract Review Committee of the Board, 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 2014, as well as information considered throughout the year at meetings of the Board and its committees. Such information included, among other things, the following:
Information about Fees, Performance and Expenses
ź | An independent report comparing the advisory and related fees paid by each fund with fees paid by comparable funds; |
ź | An independent report comparing each fund’s total expense ratio and its components to comparable funds; |
ź | An independent report 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; |
ź | Data regarding investment performance in comparison to benchmark indices and customized peer groups identified by the adviser in consultation with the Board; |
ź | 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; |
ź | Profitability analyses for each adviser with respect to each fund; |
Information about Portfolio Management and Trading
ź | Descriptions of the investment management services provided to each fund, including the investment strategies and processes employed, and any changes in portfolio management processes and personnel; |
ź | Information about the allocation of brokerage and the benefits received by each adviser as a result of brokerage allocation, including information concerning the acquisition of research through client commission arrangements and the fund’s policies with respect to “soft dollar” arrangements; |
ź | Data relating to portfolio turnover rates of each fund; |
ź | 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; |
ź | Information about each adviser’s processes for monitoring best execution of portfolio transactions, and other policies and practices of each adviser with respect to trading; |
Information about each Adviser
ź | Reports detailing the financial results and condition of each adviser; |
ź | Descriptions of the qualifications, education and experience of the individual investment professionals whose responsibilities include portfolio management and investment research for the funds, and information relating to their compensation and responsibilities with respect to managing other mutual funds and investment accounts; |
ź | Copies of the Codes of Ethics of each adviser and its affiliates, together with information relating to compliance with and the administration of such codes; |
ź | Copies of or descriptions of each adviser’s policies and procedures relating to proxy voting, the handling of corporate actions and class actions; |
ź | Information concerning the resources devoted to compliance efforts undertaken by each adviser and its affiliates on behalf of the funds (including descriptions of various compliance programs) and their record of compliance with investment policies and restrictions, including policies with respect to market-timing, late trading and selective portfolio disclosure, and with policies on personal securities transactions; |
ź | Descriptions of the business continuity and disaster recovery plans of each adviser and its affiliates; |
ź | 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; |
23 |
Eaton Vance
Atlanta Capital Focused Growth Fund
Board of Trustees’ Contract Approval — continued
Other Relevant Information
ź | Information concerning the nature, cost and character of the administrative and other non-investment management services provided by Eaton Vance Management and its affiliates; |
ź | Information concerning management of the relationship with the custodian, subcustodians and fund accountants by each adviser or the funds’ administrator; and |
ź | The terms of each advisory agreement. |
Over the course of the twelve-month period ended April 30, 2014, with respect to one or more funds, the Board met nine 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, seventeen, eleven, six and ten times respectively. At such meetings, the Trustees participated in investment and performance reviews with the portfolio managers and other investment professionals of each adviser relating to each fund, and considered the investment and trading strategies used in pursuing each fund’s investment objective, including, where relevant, the use of derivative instruments, as well as processes for monitoring best execution of portfolio transactions and 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.
For funds that invest through one or more underlying portfolios, the Board considered similar information about the portfolio(s) when considering the approval of advisory agreements. In addition, in cases where the 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, legal counsel for the Independent Trustees. The members of the Contract Review Committee relied upon the advice of such counsel and their own business judgment in determining the material factors to be considered in evaluating each advisory and sub-advisory agreement and the weight to be given to each such factor. The conclusions reached with respect to each advisory and sub-advisory agreement were based on a comprehensive evaluation of all the information provided and not any single factor. Moreover, each member of the Contract Review Committee may have placed varying emphasis on particular factors in reaching conclusions with respect to each advisory and sub-advisory agreement. In evaluating each 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 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 agreement of Eaton Vance Atlanta Capital Focused Growth Fund (the “Fund”), with Boston Management and Research (the “Adviser”), and the sub-advisory agreement with Atlanta Capital Management Company, LLC (the “Sub-adviser”), each an affiliate of Eaton Vance Management, including their fee structures, is in the interests of shareholders and, therefore, the Contract Review Committee recommended to the Board approval of each agreement. The Board accepted the recommendation of the Contract Review Committee as well as the factors considered and conclusions reached by the Contract Review Committee with respect to the agreements. Accordingly, the Board, including a majority of the Independent Trustees, voted to approve continuation of the investment advisory agreement and the sub-advisory agreement for the Fund.
Nature, Extent and Quality of Services
In considering whether to approve the investment advisory 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 supervising the Sub-adviser. The Board also took into account the resources dedicated to portfolio management and other services, including the compensation methods of the Adviser to recruit and retain investment personnel, and the time and attention devoted to the Fund by senior management. With respect to the Sub-adviser, the Board took into account the resources available to the Sub-adviser in fulfilling its duties under the sub-advisory agreement and the Sub-adviser’s experience in managing equity portfolios.
The Board reviewed 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 personnel, selective disclosure of portfolio holdings, late trading, frequent trading, portfolio valuation, business continuity and the allocation of investment opportunities. The Board also evaluated the responses of the Adviser and its affiliates to requests in recent years from regulatory authorities such as the Securities and Exchange Commission and the Financial Industry Regulatory Authority.
24 |
Eaton Vance
Atlanta Capital Focused Growth Fund
Board of Trustees’ Contract Approval — continued
The Board considered shareholder and other administrative services provided or managed by Eaton Vance Management and its affiliates, including transfer agency and accounting services. The Board evaluated the benefits to shareholders of investing in a fund that is a part of a large family of funds, including 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 agreement and the sub-advisory agreement.
Fund Performance
The Board compared the Fund’s investment performance to a relevant universe of similarly managed funds identified by an independent data provider and appropriate benchmark indices. The Board reviewed comparative performance data for the one-, three-, five- and ten-year periods ended September 30, 2013 for the Fund. The Board noted that actions are being taken by the Adviser to improve Fund performance and concluded that additional time is required to evaluate the effectiveness of such actions.
Management Fees and Expenses
The Board reviewed contractual fee rates for investment advisory and administrative services payable by the Fund (referred to as “management fees”). As part of its review, the Board considered the management fees and the Fund’s total expense ratio for the year ended September 30, 2013, as compared to a group of similarly managed funds selected by an independent data provider. The Board noted that the Adviser had waived fees and/or paid expenses for the Fund. The Board also considered factors that had an impact on Fund expense ratios, as identified by management in response to inquiries from the Contract Review Committee, as well as actions taken by management in recent years to reduce expenses at the fund complex level, including the negotiation of reduced fees for transfer agency and custody services.
After reviewing 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
The Board reviewed 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 revenue sharing or other payments by the Adviser and its affiliates to third parties in respect of distribution services. The Board also considered other direct or indirect benefits received by the Adviser and its affiliates, 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 reasonable.
Economies of Scale
In reviewing management fees and profitability, the Board also considered the extent to which the Adviser and its affiliates, on the one hand, and the Fund, on the other hand, can expect to realize benefits from economies of scale as the assets of the Fund increase. The Board acknowledged the difficulty in accurately measuring the benefits resulting from the economies of scale with respect to the management of any specific fund or group of funds. The Board 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. 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 economies of scale in the future.
25 |
Eaton Vance
Atlanta Capital Focused Growth Fund
Management and Organization
Fund Management. The Trustees of Eaton Vance Growth Trust (the Trust) are responsible for the overall management and supervision of the Trust’s affairs. The Trustees and officers of the Trust are listed below. Except as indicated, each individual has held the office shown or other offices in the same company for the last five years. Trustees and officers of the Trust hold indefinite terms of office. The “Noninterested Trustees” consist of those Trustees who are not “interested persons” of the Trust, as that term is defined under the 1940 Act. The business address of each Trustee and officer is Two International Place, Boston, Massachusetts 02110. As used below, “EVC” refers to Eaton Vance Corp., “EV” refers to Eaton Vance, Inc., “EVM” refers to Eaton Vance Management, “BMR” refers to Boston Management and Research and “EVD” refers to Eaton Vance Distributors, Inc. EVC and EV are the corporate parent and trustee, respectively, of EVM and BMR. EVD is the Fund’s principal underwriter and a wholly-owned subsidiary of EVC. Each officer affiliated with Eaton Vance may hold a position with other Eaton Vance affiliates that is comparable to his or her position with EVM listed below. Each Trustee oversees 182 portfolios in the Eaton Vance Complex (including all master and feeder funds in a master feeder structure). Each officer serves as an officer of certain other Eaton Vance funds. Each Trustee and officer serves until his or her successor is elected.
Name and Year of Birth | Position(s) with the |
Trustee Since(1) |
Principal Occupation(s) and Directorships During Past Five Years and Other Relevant Experience | |||
Interested Trustee | ||||||
Thomas E. Faust Jr. 1958 |
Trustee | 2007 | Chairman, Chief Executive Officer and President of EVC, Director and President of EV, Chief Executive Officer and President of EVM and BMR, and Director of EVD. Trustee and/or officer of 182 registered investment companies. Mr. Faust is an interested person because of his positions with EVM, BMR, EVD, EVC and EV, which are affiliates of the Trust. Directorships in the Last Five Years.(2) Director of EVC and Hexavest Inc. | |||
Noninterested Trustees | ||||||
Scott E. Eston 1956 |
Trustee | 2011 | Private investor. Formerly held various positions at Grantham, Mayo, Van Otterloo and Co., L.L.C. (investment management firm) (1997-2009), including Chief Operating Officer (2002-2009), Chief Financial Officer (1997-2009) and Chairman of the Executive Committee (2002-2008); President and Principal Executive Officer, GMO Trust (open-end registered investment company) (2006-2009). Former Partner, Coopers and Lybrand L.L.P. (now PricewaterhouseCoopers) (public accounting firm) (1987-1997). Directorships in the Last Five Years.(2) None. | |||
Cynthia E. Frost(3) 1961 |
Trustee | 2014 | Private investor. Formerly, Chief Investment Officer of Brown University (university endowment) (2000-2012); Portfolio Strategist for Duke Management Company (university endowment manager) (1995-2000); Managing Director, Cambridge Associates (1989-1995); Consultant, Bain and Company (1987-1989); Senior Equity Analyst, BA Investment Management Company (1983-1985). Directorships in the Last Five Years. None. | |||
George J. Gorman(3) 1952 |
Trustee | 2014 | Principal at George J. Gorman LLC (consulting firm). Formerly, Senior Partner at Ernst & Young LLP (public accounting firm) (1974-2009). Directorships in the Last Five Years. Formerly, Trustee of the Bank of America Money Market Funds Series Trust (2011-2014) and of the Ashmore Funds (2010-2014). | |||
Valerie A. Mosley(4) 1960 |
Trustee | 2014 | Chairwoman and Chief Executive Officer of Valmo Ventures (a consulting and investment firm). Former Partner and Senior Vice President, Portfolio Manager and Investment Strategist at Wellington Management Company, LLP (investment management firm) (1992-2012). Former Chief Investment Officer, PG Corbin Asset Management (1990-1992). Formerly worked in institutional corporate bond sales at Kidder Peabody (1986-1990). Directorships in the Last Five Years.(2) Director of Dynex Capital, Inc. (mortgage REIT) (since 2013). |
26 |
Eaton Vance
Atlanta Capital Focused Growth Fund
Management and Organization — continued
Name and Year of Birth | Position(s) with the |
Trustee Since(1) |
Principal Occupation(s) and Directorships During Past Five Years and Other Relevant Experience | |||
Noninterested Trustees (continued) | ||||||
William H. Park 1947 |
Trustee | 2003 | Consultant and private investor. Formerly, Chief Financial Officer, Aveon Group L.P. (investment management firm) (2010-2011). Formerly, Vice Chairman, Commercial Industrial Finance Corp. (specialty finance company) (2006-2010). Formerly, President and Chief Executive Officer, Prizm Capital Management, LLC (investment management firm) (2002-2005). Formerly, Executive Vice President and Chief Financial Officer, United Asset Management Corporation (investment management firm) (1982-2001). Formerly, Senior Manager, Price Waterhouse (now PricewaterhouseCoopers) (an independent registered public accounting firm) (1972-1981). Directorships in the Last Five Years.(2) None. | |||
Ronald A. Pearlman 1940 |
Trustee | 2003 | Lawyer and consultant. Formerly, Professor of Law, Georgetown University Law Center (1999-2014). Formerly, Partner, Covington & Burling LLP (law firm) (1991-2000). Formerly, Chief of Staff, Joint Committee on Taxation, U.S. Congress (1988-1990). Formerly, Deputy Assistant Secretary (Tax Policy) and Assistant Secretary (Tax Policy), U.S. Department of the Treasury (1983-1985). Directorships in the Last Five Years.(2) None. | |||
Helen Frame Peters 1948 |
Trustee | 2008 | Professor of Finance, Carroll School of Management, Boston College. Formerly, Dean, Carroll School of Management, Boston College (2000-2002). Formerly, Chief Investment Officer, Fixed Income, Scudder Kemper Investments (investment management firm) (1998-1999). Formerly, Chief Investment Officer, Equity and Fixed Income, Colonial Management Associates (investment management firm) (1991-1998). Directorships in the Last Five Years.(2) Formerly, Director of BJ’s Wholesale Club, Inc. (wholesale club retailer) (2004-2011). Formerly, Trustee of SPDR Index Shares Funds and SPDR Series Trust (exchange traded funds) (2000-2009). Formerly, Director of Federal Home Loan Bank of Boston (a bank for banks) (2007-2009). | |||
Harriett Tee Taggart 1948 |
Trustee | 2011 | Managing Director, Taggart Associates (a professional practice firm). Formerly, Partner and Senior Vice President, Wellington Management Company, LLP (investment management firm) (1983-2006). Directorships in the Last Five Years.(2) Director of Albemarle Corporation (chemicals manufacturer) (since 2007) and The Hanover Group (specialty property and casualty insurance company) (since 2009). Formerly, Director of Lubrizol Corporation (specialty chemicals) (2007-2011). | |||
Ralph F. Verni 1943 |
Chairman of the Board and Trustee |
2007 (Chairman) 2005 (Trustee) |
Consultant and private investor. Formerly, Chief Investment Officer (1982-1992), Chief Financial Officer (1988-1990) and Director (1982-1992), New England Life. Formerly, Chairperson, New England Mutual Funds (1982-1992). Formerly, President and Chief Executive Officer, State Street Management & Research (1992-2000). Formerly, Chairperson, State Street Research Mutual Funds (1992-2000). Formerly, Director, W.P. Carey, LLC (1998-2004) and First Pioneer Farm Credit Corp. (2002-2006). Directorships in the Last Five Years.(2) None. | |||
Principal Officers who are not Trustees | ||||||
Name and Year of Birth | Position(s) with the Trust |
Officer Since(5) |
Principal Occupation(s) During Past Five Years | |||
1956 |
President | 2003 | Vice President and Chief Income Investment Officer of EVM and BMR. | |||
Maureen A. Gemma 1960 |
Vice President, Secretary and Chief Legal Officer | 2005 | Vice President of EVM and BMR. | |||
1967 |
Treasurer | 2007 | Vice President of EVM and BMR. |
27 |
Eaton Vance
Atlanta Capital Focused Growth Fund
Management and Organization — continued
Name and Year of Birth | Position(s) with the Trust |
Officer Since(5) |
Principal Occupation(s) During Past Five Years | |||
Principal Officers who are not Trustees (continued) | ||||||
Paul M. O’Neil 1953 |
Chief Compliance Officer | 2004 | Vice President of EVM and BMR. |
(1) | Year first appointed to serve as Trustee for a fund in the Eaton Vance family of funds. Each Trustee has served continuously since appointment unless indicated otherwise. |
(2) | During their respective tenures, the Trustees (except for Ms. Frost and Mr. Gorman) also served as Board members of one or more of the following funds (which operated in the years noted): eUnitsTM 2 Year U.S. Market Participation Trust: Upside to Cap / Buffered Downside (launched in 2012 and terminated in 2014); eUnitsTM 2 Year U.S. Market Participation Trust II: Upside to Cap / Buffered Downside (launched in 2012 and terminated in 2014); Eaton Vance Credit Opportunities Fund (launched in 2005 and terminated in 2010); Eaton Vance Insured Florida Plus Municipal Bond Fund (launched in 2002 and terminated in 2009); and Eaton Vance National Municipal Income Trust (launched in 1998 and terminated in 2009). However, Ms. Mosley did not serve as a Board member of eUnitsTM 2 Year U.S. Market Participation Trust: Upside to Cap / Buffered Downside (launched in 2012 and terminated in 2014). |
(3) | Ms. Frost and Mr. Gorman began serving as Trustees effective May 29, 2014. |
(4) | Ms. Mosley began serving as a Trustee effective January 1, 2014. |
(5) | Year first elected to serve as officer of a fund in the Eaton Vance family of funds when the officer has served continuously. Otherwise, year of most recent election as an officer of a fund in the Eaton Vance family of funds. Titles may have changed since initial election. |
The SAI for the Fund includes additional information about the Trustees and officers of the Fund and can be obtained without charge on Eaton Vance’s website at www.eatonvance.com or by calling 1-800-262-1122.
28 |
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:
ź | 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. |
ź | 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. |
ź | Policies and procedures (including physical, electronic and procedural safeguards) are in place that are designed to protect the confidentiality of such information. |
ź | 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’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 1-800-262-1122, or contact your financial advisor. Your instructions that householding not apply to delivery of your Eaton Vance documents will be effective within 30 days of receipt by Eaton Vance or your financial 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 1-800-262-1122 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 1-800-262-1122 and by accessing the SEC’s website at www.sec.gov.
29 |
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Investment Adviser
Boston Management and Research
Two International Place
Sub-Adviser
Atlanta Capital Management Company, LLC
1075 Peachtree Street NE
Suite 2100
Administrator
Eaton Vance Management
Two International Place
Principal Underwriter*
Eaton Vance Distributors, Inc.
Two International Place
(617) 482-8260
Custodian
State Street Bank and Trust Company
State Street Financial Center, One Lincoln Street
Transfer Agent
BNY Mellon Investment Servicing (US) Inc.
Attn: Eaton Vance Funds
P.O. Box 9653
Providence, RI 02940-9653
(800) 262-1122
Independent Registered Public Accounting Firm
Deloitte & Touche LLP
200 Berkeley Street
Boston, MA 02116-5022
Fund Offices
Two International Place
* | 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. |
1451 9.30.14
Eaton Vance
Atlanta Capital
Select Equity Fund
Annual Report
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 1-800-262-1122.
Annual Report September 30, 2014
Eaton Vance
Atlanta Capital Select Equity Fund
Management’s Discussion of Fund Performance |
2 | |||
Performance |
3 | |||
Fund Profile |
4 | |||
Endnotes and Additional Disclosures |
5 | |||
Fund Expenses |
6 | |||
Financial Statements |
7 | |||
Report of Independent Registered Public Accounting Firm |
20 | |||
Federal Tax Information |
21 | |||
Special Meeting of Shareholders |
22 | |||
Board of Trustees’ Contract Approval |
23 | |||
Management and Organization |
26 | |||
Important Notices |
29 |
Eaton Vance
Atlanta Capital Select Equity Fund
Management’s Discussion of Fund Performance1
Economic and Market Conditions
U.S. stocks delivered solid gains for the 12-month period ended September 30, 2014. Beginning in the second half of October 2013, the market turned upward after a federal budget agreement ended the 16-day U.S. government shutdown. In December, when the U.S. Federal Reserve (the Fed) made its long-anticipated move to begin “tapering” economic stimulus, U.S. stocks put aside earlier fears of tapering and soared to record highs.
Harsh winter weather and geopolitical tensions weighed on the market in early 2014, but U.S. stocks subsequently resumed their advance amid signs of a gradually strengthening economy. The U.S. equity market generally climbed at a moderate pace through the spring of 2014, until the outbreak of hostilities in Iraq in June sent stocks sharply lower. But equities soon bounced back once the Fed reiterated its pledge to maintain low interest rates. U.S. stocks seesawed throughout the third quarter of 2014, falling in late July amid mounting geopolitical and economic concerns, before rebounding in August and into September, only to struggle again in the final couple weeks of the 12-month period.
However, the major U.S. stock indexes ended the 12-month period with strong performance. The S&P 500 Index2 advanced 19.73% for the period, while the Dow Jones Industrial Average gained 15.29%. The technology-laden NASDAQ Composite Index added 20.61%. Large-cap U.S. stocks (as measured by the Russell 1000 Index) generally fared better than their small-cap counterparts (as measured by the Russell 2000 Index) for the 12-month period. Within the large-cap space, growth stocks generally outpaced value stocks, while the reverse was true in the small-cap category.
Fund Performance
For the 12-month period ended September 30, 2014, Eaton Vance Atlanta Capital Select Equity Fund (the Fund) had a total return of 9.78% for Class A shares at net asset value (NAV). By comparison, the Fund’s benchmark, the Russell 1000 Index (the Index), returned 19.01% for the same period.
The Fund underperformed the Index due to both stock selection and sector allocation. Of the 10 economic sectors in the Index, the Fund delivered positive returns in all seven sectors in which it was invested. The Index recorded positive returns in all 10 sectors.
The information technology sector detracted the most from the Fund’s performance relative to the Index, as a result of both stock selection and an underweight position. In the software industry, ANSYS, Inc., a leader in product simulation technology, was among the Fund’s worst-performing individual stocks. Stock selection hampered the Fund’s performance versus the Index in the industrials sector. Within the sector, security systems provider ADT Corp., part of the commercial services and supplies industry, was the Fund’s weakest-performing individual stock, as the company faced increased competition during the period. The Fund’s sole holding in the professional services industry, risk management company Verisk Analytics, Inc., also hurt performance relative to the Index, as the stock underperformed. The consumer discretionary and consumer staples sectors also detracted from relative Fund performance, both due largely to stock selection. Within consumer discretionary, the Fund’s holdings in the distributors and specialty retail industries were notable laggards during the period. In the distributors industry, LKQ Corp., a leading aftermarket auto parts supplier, was among the Fund’s worst-performing individual stocks amid concern about the potential effect of collision avoidance technology on its business. Within the consumer staples sector, distilled drinks maker Diageo PLC, an out-of-Index holding, was one of the Fund’s weakest-performing individual stocks after its financial results disappointed.
On the positive side, the Fund’s lack of exposure to the underperforming energy sector contributed to performance versus the Index. In addition, the materials sector boosted Fund performance relative to the Index, due to stock selection. Within the sector, aluminum can producer Ball Corp., part of the containers and packaging industry, was one of the Fund’s top-performing individual stocks. The financials sector also contributed to relative Fund performance, particularly the Fund’s holdings in the insurance industry. Specialty commercial insurance provider Markel Corp. was among the Fund’s best-performing individual stocks after reporting strong earnings. Overall, the Fund’s top-performing individual stock for the 12-month period was medical device supplier Covidien PLC within the health care sector. The stock advanced after the company announced a planned merger.
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 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 |
Eaton Vance
Atlanta Capital Select Equity Fund
Performance2,3
Portfolio Managers William O. Bell IV, CFA, W. Matthew Hereford, CFA and Charles B. Reed, CFA, each of Atlanta Capital Management Company, LLC.
% Average Annual Total Returns | Class Inception Date |
Performance Inception Date |
One Year | Five Years | Since Inception |
|||||||||||||||
Class A at NAV |
01/03/2012 | 01/03/2012 | 9.78 | % | — | 17.41 | % | |||||||||||||
Class A with 5.75% Maximum Sales Charge |
— | — | 3.48 | — | 14.90 | |||||||||||||||
Class C at NAV |
03/19/2013 | 01/03/2012 | 8.97 | — | 16.91 | |||||||||||||||
Class C with 1% Maximum Sales Charge |
— | — | 7.97 | — | 16.91 | |||||||||||||||
Class I at NAV |
01/03/2012 | 01/03/2012 | 10.04 | — | 17.68 | |||||||||||||||
Russell 1000 Index |
— | — | 19.01 | % | 15.89 | % | 19.99 | % | ||||||||||||
% Total Annual Operating Expense Ratios4 | Class A | Class C | Class I | |||||||||||||||||
Gross |
1.49 | % | 2.24 | % | 1.24 | % | ||||||||||||||
Net |
1.21 | 1.96 | 0.96 |
Growth of $10,000
This graph shows the change in value of a hypothetical investment of $10,000 in Class A of the Fund for the period indicated. For comparison, the same investment is shown in the indicated index.
Growth of Investment | Amount Invested | Period Beginning | At NAV | With Maximum Sales Charge | ||||||||||||
Class C |
$ | 10,000 | 01/03/2012 | $ | 15,348 | N.A. | ||||||||||
Class I |
$ | 250,000 | 01/03/2012 | $ | 390,666 | N.A. |
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 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.
3 |
Eaton Vance
Atlanta Capital Select Equity Fund
Fund Profile
Sector Allocation (% of net assets)5,6
Top 10 Holdings (% of net assets)6
TJX Cos., Inc. (The) |
6.2 | % | ||
Markel Corp. |
5.9 | |||
Wal-Mart Stores, Inc. |
5.5 | |||
Berkshire Hathaway, Inc., Class B |
4.9 | |||
Health Care Select Sector SPDR Fund (The) |
4.4 | |||
ANSYS, Inc. |
4.3 | |||
Pall Corp. |
4.0 | |||
Affiliated Managers Group, Inc. |
3.9 | |||
Danaher Corp. |
3.8 | |||
White Mountains Insurance Group, Ltd. |
3.8 | |||
Total |
46.7 | % |
See Endnotes and Additional Disclosures in this report.
4 |
Eaton Vance
Atlanta Capital Select Equity Fund
Endnotes and Additional Disclosures
1 | The views expressed in this report are those of the portfolio manager(s) and are current only through the date stated at the top of this page. These views are subject to change at any time based upon market or other conditions, and Eaton Vance and the Fund(s) disclaim any responsibility to update such views. These views may not be relied upon as investment advice and, because investment decisions are based on many factors, may not be relied upon as an indication of trading intent on behalf of any Eaton Vance fund. This commentary may contain statements that are not historical facts, referred to as “forward looking statements”. The Fund’s actual future results may differ significantly from those stated in any forward looking statement, depending on factors such as changes in securities or financial markets or general economic conditions, the volume of sales and purchases of Fund shares, the continuation of investment advisory, administrative and service contracts, and other risks discussed from time to time in the Fund’s filings with the Securities and Exchange Commission. |
2 | S&P 500 Index is an unmanaged index of large-cap stocks commonly used as a measure of U.S. stock market performance. Dow Jones Industrial Average is a price-weighted average of 30 blue-chip stocks that are generally the leaders in their industry. NASDAQ Composite Index is a market capitalization-weighted index of all domestic and international securities listed on NASDAQ. Russell 1000 Index is an unmanaged index of 1,000 U.S. large-cap stocks. Russell 2000 Index is an unmanaged index of 2,000 U.S. small-cap 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. |
3 | 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 prior to the inception date of a class may be linked to the performance of an older class of the Fund. This linked performance is adjusted for any applicable sales charge, but is not adjusted for class expense differences. If adjusted for such differences, the performance would be different. Performance presented in the financial highlights included in the financial statements is not linked. In the performance table, the performance of Class C is linked to Class A. Performance since inception for an index, if presented, is the performance since the Fund’s or oldest share class’ inception, as applicable. |
4 | Source: Fund prospectus. Net expense ratio reflects a contractual expense reimbursement that continues through 1/31/15. Without the reimbursement, if applicable, performance would have been lower. |
5 | The Fund may obtain exposure to certain market segments through investments in exchange-traded funds (ETFs). For purposes of the charts, the Fund’s investments in ETFs are included based on the portfolio composition of each ETF. |
6 | Excludes cash and cash equivalents. |
Fund profile subject to change due to active management. |
5 |
Eaton Vance
Atlanta Capital Select Equity Fund
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 (April 1, 2014 – September 30, 2014).
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 (4/1/14) |
Ending Account Value (9/30/14) |
Expenses Paid During Period* (4/1/14 – 9/30/14) |
Annualized Expense Ratio |
|||||||||||||
Actual |
|
|||||||||||||||
Class A |
$ | 1,000.00 | $ | 1,021.80 | $ | 6.08 | ** | 1.20 | % | |||||||
Class C |
$ | 1,000.00 | $ | 1,018.00 | $ | 9.86 | ** | 1.95 | % | |||||||
Class I |
$ | 1,000.00 | $ | 1,023.10 | $ | 4.82 | ** | 0.95 | % | |||||||
Hypothetical |
|
|||||||||||||||
(5% return per year before expenses) |
|
|||||||||||||||
Class A |
$ | 1,000.00 | $ | 1,019.10 | $ | 6.07 | ** | 1.20 | % | |||||||
Class C |
$ | 1,000.00 | $ | 1,015.30 | $ | 9.85 | ** | 1.95 | % | |||||||
Class I |
$ | 1,000.00 | $ | 1,020.30 | $ | 4.81 | ** | 0.95 | % |
* | 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 183/365 (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 March 31, 2014. |
** | Absent an allocation of certain expenses to affiliates, the expenses would be higher. |
6 |
Eaton Vance
Atlanta Capital Select Equity Fund
Portfolio of Investments
Common Stocks — 92.6% | ||||||||
Security | Shares | Value | ||||||
Banks — 3.6% |
| |||||||
U.S. Bancorp |
90,748 | $ | 3,795,989 | |||||
$ | 3,795,989 | |||||||
Beverages — 2.3% |
| |||||||
Diageo PLC ADR |
21,047 | $ | 2,428,824 | |||||
$ | 2,428,824 | |||||||
Capital Markets — 7.6% |
| |||||||
Affiliated Managers Group, Inc.(1) |
20,371 | $ | 4,081,533 | |||||
TD Ameritrade Holding Corp. |
117,172 | 3,910,030 | ||||||
$ | 7,991,563 | |||||||
Chemicals — 5.7% |
| |||||||
Praxair, Inc. |
24,338 | $ | 3,139,602 | |||||
Sherwin-Williams Co. (The) |
13,232 | 2,897,676 | ||||||
$ | 6,037,278 | |||||||
Commercial Services & Supplies — 4.6% |
| |||||||
Stericycle, Inc.(1) |
18,178 | $ | 2,118,828 | |||||
Tyco International, Ltd. |
61,434 | 2,738,113 | ||||||
$ | 4,856,941 | |||||||
Communications Equipment — 2.1% |
| |||||||
QUALCOMM, Inc. |
30,033 | $ | 2,245,567 | |||||
$ | 2,245,567 | |||||||
Containers & Packaging — 3.3% |
| |||||||
Ball Corp. |
54,029 | $ | 3,418,415 | |||||
$ | 3,418,415 | |||||||
Distributors — 1.9% |
||||||||
LKQ Corp.(1) |
76,226 | $ | 2,026,849 | |||||
$ | 2,026,849 | |||||||
Diversified Financial Services — 4.9% |
| |||||||
Berkshire Hathaway, Inc., Class B(1) |
36,998 | $ | 5,110,904 | |||||
$ | 5,110,904 | |||||||
Food & Staples Retailing — 5.5% |
| |||||||
Wal-Mart Stores, Inc. |
75,648 | $ | 5,784,802 | |||||
$ | 5,784,802 | |||||||
Security | Shares | Value | ||||||
Food Products — 2.2% |
| |||||||
Nestle SA ADR |
30,719 | $ | 2,261,840 | |||||
$ | 2,261,840 | |||||||
Health Care Equipment & Supplies — 3.2% |
| |||||||
DENTSPLY International, Inc. |
73,496 | $ | 3,351,418 | |||||
$ | 3,351,418 | |||||||
Health Care Providers & Services — 3.0% |
| |||||||
Henry Schein, Inc.(1) |
27,372 | $ | 3,188,017 | |||||
$ | 3,188,017 | |||||||
Industrial Conglomerates — 3.8% |
| |||||||
Danaher Corp. |
52,065 | $ | 3,955,899 | |||||
$ | 3,955,899 | |||||||
Insurance — 9.7% |
| |||||||
Markel Corp.(1) |
9,790 | $ | 6,227,909 | |||||
White Mountains Insurance Group, Ltd. |
6,221 | 3,919,665 | ||||||
$ | 10,147,574 | |||||||
Machinery — 4.0% |
| |||||||
Pall Corp. |
50,520 | $ | 4,228,524 | |||||
$ | 4,228,524 | |||||||
Media — 2.1% |
| |||||||
Scripps Networks Interactive, Class A |
28,309 | $ | 2,210,650 | |||||
$ | 2,210,650 | |||||||
Professional Services — 2.0% |
| |||||||
Verisk Analytics, Inc., Class A(1) |
35,260 | $ | 2,146,981 | |||||
$ | 2,146,981 | |||||||
Software — 7.5% |
| |||||||
ANSYS, Inc.(1) |
59,177 | $ | 4,477,923 | |||||
Oracle Corp. |
88,271 | 3,379,014 | ||||||
$ | 7,856,937 | |||||||
Specialty Retail — 13.6% |
| |||||||
Home Depot, Inc. (The) |
23,436 | $ | 2,150,019 | |||||
O’Reilly Automotive, Inc.(1) |
17,861 | 2,685,580 | ||||||
Ross Stores, Inc. |
38,202 | 2,887,307 |
7 | See Notes to Financial Statements. |
Eaton Vance
Atlanta Capital Select Equity Fund
Portfolio of Investments — continued
Security | Shares | Value | ||||||
Specialty Retail (continued) |
| |||||||
TJX Cos., Inc. (The) |
110,873 | $ | 6,560,355 | |||||
$ | 14,283,261 | |||||||
Total Common Stocks |
|
$ | 97,328,233 | |||||
Exchange-Traded Funds — 4.4% | ||||||||
Security | Shares | Value | ||||||
Health Care Select Sector SPDR Fund (The) |
71,513 | $ | 4,570,396 | |||||
Total Exchange-Traded Funds |
|
$ | 4,570,396 | |||||
Short-Term Investments — 3.0% | ||||||||
Description | Interest (000’s omitted) |
Value | ||||||
Eaton Vance Cash Reserves Fund, LLC, 0.14%(2) |
$ | 3,116 | $ | 3,116,082 | ||||
Total Short-Term Investments |
|
$ | 3,116,082 | |||||
Total Investments — 100.0% |
|
$ | 105,014,711 | |||||
Other Assets, Less Liabilities — 0.0%(3) |
|
$ | 36,628 | |||||
Net Assets — 100.0% |
|
$ | 105,051,339 | |||||
The percentage shown for each investment category in the Portfolio of Investments is based on net assets.
ADR | – | American Depositary Receipt |
(1) | Non-income producing security. |
(2) | 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 September 30, 2014. |
(3) | Amount is less than 0.05%. |
8 | See Notes to Financial Statements. |
Eaton Vance
Atlanta Capital Select Equity Fund
Statement of Assets and Liabilities
Assets | September 30, 2014 | |||
Unaffiliated investments, at value (identified cost, $86,263,859) |
$ | 101,898,629 | ||
Affiliated investment, at value (identified cost, $3,116,082) |
3,116,082 | |||
Dividends receivable |
77,729 | |||
Interest receivable from affiliated investment |
627 | |||
Receivable for Fund shares sold |
291,077 | |||
Tax reclaims receivable |
2,838 | |||
Receivable from affiliates |
714 | |||
Total assets |
$ | 105,387,696 | ||
Liabilities | ||||
Payable for Fund shares redeemed |
$ | 181,466 | ||
Payable to affiliates: |
||||
Investment adviser and administration fee |
69,755 | |||
Distribution and service fees |
18,976 | |||
Accrued expenses |
66,160 | |||
Total liabilities |
$ | 336,357 | ||
Net Assets |
$ | 105,051,339 | ||
Sources of Net Assets | ||||
Paid-in capital |
$ | 88,429,402 | ||
Accumulated net realized gain |
987,167 | |||
Net unrealized appreciation |
15,634,770 | |||
Total |
$ | 105,051,339 | ||
Class A Shares | ||||
Net Assets |
$ | 54,601,730 | ||
Shares Outstanding |
3,534,915 | |||
Net Asset Value and Redemption Price Per Share |
||||
(net assets ÷ shares of beneficial interest outstanding) |
$ | 15.45 | ||
Maximum Offering Price Per Share |
||||
(100 ÷ 94.25 of net asset value per share) |
$ | 16.39 | ||
Class C Shares | ||||
Net Assets |
$ | 9,128,136 | ||
Shares Outstanding |
597,881 | |||
Net Asset Value and Offering Price Per Share* |
||||
(net assets ÷ shares of beneficial interest outstanding) |
$ | 15.27 | ||
Class I Shares | ||||
Net Assets |
$ | 41,321,473 | ||
Shares Outstanding |
2,663,097 | |||
Net Asset Value, Offering Price and Redemption Price Per Share |
||||
(net assets ÷ shares of beneficial interest outstanding) |
$ | 15.52 |
On sales of $50,000 or more, the offering price of Class A shares is reduced.
* | Redemption price per share is equal to the net asset value less any applicable contingent deferred sales charge. |
9 | See Notes to Financial Statements. |
Eaton Vance
Atlanta Capital Select Equity Fund
Statement of Operations
Investment Income | Year Ended |
|||
Dividends (net of foreign taxes, $13,868) |
$ | 1,065,601 | ||
Interest allocated from affiliated investment |
9,935 | |||
Expenses allocated from affiliated investment |
(1,181 | ) | ||
Total investment income |
$ | 1,074,355 | ||
Expenses | ||||
Investment adviser and administration fee |
$ | 818,200 | ||
Distribution and service fees |
||||
Class A |
115,766 | |||
Class C |
79,268 | |||
Trustees’ fees and expenses |
5,163 | |||
Custodian fee |
46,212 | |||
Transfer and dividend disbursing agent fees |
76,195 | |||
Legal and accounting services |
36,664 | |||
Printing and postage |
23,690 | |||
Registration fees |
42,418 | |||
Miscellaneous |
14,865 | |||
Total expenses |
$ | 1,258,441 | ||
Deduct — |
||||
Allocation of expenses to affiliates |
$ | 90,829 | ||
Total expense reductions |
$ | 90,829 | ||
Net expenses |
$ | 1,167,612 | ||
Net investment loss |
$ | (93,257 | ) | |
Realized and Unrealized Gain (Loss) | ||||
Net realized gain (loss) — |
||||
Investment transactions |
$ | 1,808,880 | ||
Investment transactions allocated from affiliated investment |
111 | |||
Net realized gain |
$ | 1,808,991 | ||
Change in unrealized appreciation (depreciation) — |
||||
Investments |
$ | 6,655,223 | ||
Net change in unrealized appreciation (depreciation) |
$ | 6,655,223 | ||
Net realized and unrealized gain |
$ | 8,464,214 | ||
Net increase in net assets from operations |
$ | 8,370,957 |
10 | See Notes to Financial Statements. |
Eaton Vance
Atlanta Capital Select Equity Fund
Statements of Changes in Net Assets
Year Ended September 30, | ||||||||
Increase (Decrease) in Net Assets | 2014 | 2013 | ||||||
From operations — |
||||||||
Net investment income (loss) |
$ | (93,257 | ) | $ | 3,313 | |||
Net realized gain (loss) from investment transactions |
1,808,991 | (15,299 | ) | |||||
Net change in unrealized appreciation (depreciation) from investments |
6,655,223 | 7,702,108 | ||||||
Net increase in net assets from operations |
$ | 8,370,957 | $ | 7,690,122 | ||||
Distributions to shareholders — |
||||||||
From net investment income |
||||||||
Class I |
$ | — | $ | (17,489 | ) | |||
From net realized gain |
||||||||
Class A |
(122,678 | ) | (8,695 | ) | ||||
Class C |
(21,446 | ) | — | |||||
Class I |
(175,076 | ) | (64,708 | ) | ||||
Total distributions to shareholders |
$ | (319,200 | ) | $ | (90,892 | ) | ||
Transactions in shares of beneficial interest — |
||||||||
Proceeds from sale of shares |
||||||||
Class A |
$ | 42,294,340 | $ | 24,889,264 | ||||
Class C |
5,685,838 | 4,516,150 | ||||||
Class I |
38,705,405 | 15,979,459 | ||||||
Net asset value of shares issued to shareholders in payment of distributions declared |
||||||||
Class A |
122,044 | 8,674 | ||||||
Class C |
21,317 | — | ||||||
Class I |
63,972 | 9,657 | ||||||
Cost of shares redeemed |
||||||||
Class A |
(19,820,844 | ) | (3,554,072 | ) | ||||
Class C |
(1,571,994 | ) | (198,112 | ) | ||||
Class I |
(42,031,636 | ) | (1,431,833 | ) | ||||
Net increase in net assets from Fund share transactions |
$ | 23,468,442 | $ | 40,219,187 | ||||
Net increase in net assets |
$ | 31,520,199 | $ | 47,818,417 | ||||
Net Assets | ||||||||
At beginning of year |
$ | 73,531,140 | $ | 25,712,723 | ||||
At end of year |
$ | 105,051,339 | $ | 73,531,140 | ||||
Accumulated distributions in excess of net investment income included in net assets |
||||||||
At end of year |
$ | — | $ | (8,016 | ) |
11 | See Notes to Financial Statements. |
Eaton Vance
Atlanta Capital Select Equity Fund
Financial Highlights
Class A | ||||||||||||
Year Ended September 30, | Period Ended |
|||||||||||
2014 | 2013 | |||||||||||
Net asset value — Beginning of period |
$ | 14.120 | $ | 11.770 | $ | 10.000 | ||||||
Income (Loss) From Operations | ||||||||||||
Net investment loss(2) |
$ | (0.024 | ) | $ | (0.025 | ) | $ | (0.022 | ) | |||
Net realized and unrealized gain |
1.402 | 2.396 | 1.792 | |||||||||
Total income from operations |
$ | 1.378 | $ | 2.371 | $ | 1.770 | ||||||
Less Distributions | ||||||||||||
From net realized gain |
$ | (0.048 | ) | $ | (0.021 | ) | $ | — | ||||
Total distributions |
$ | (0.048 | ) | $ | (0.021 | ) | $ | — | ||||
Net asset value — End of period |
$ | 15.450 | $ | 14.120 | $ | 11.770 | ||||||
Total Return(3) |
9.78 | % | 20.18 | % | 17.70 | %(4) | ||||||
Ratios/Supplemental Data | ||||||||||||
Net assets, end of period (000’s omitted) |
$ | 54,602 | $ | 28,280 | $ | 4,690 | ||||||
Ratios (as a percentage of average daily net assets): |
||||||||||||
Expenses(5) |
1.20 | % | 1.20 | % | 1.20 | %(6) | ||||||
Net investment loss |
(0.16 | )% | (0.19 | )% | (0.27 | )%(6) | ||||||
Portfolio Turnover |
45 | % | 6 | % | 12 | %(4) |
(1) | For the period from the start of business, January 3, 2012, to September 30, 2012. |
(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 and do not reflect the effect of sales charges. |
(4) | Not annualized. |
(5) | The investment adviser, administrator and sub-adviser subsidized certain operating expenses (equal to 0.09%, 0.28% and 1.37% of average daily net assets for the years ended September 30, 2014 and 2013 and the period from the start of business, January 3, 2012, to September 30, 2012, respectively). Absent this subsidy, total return would have been lower. |
(6) | Annualized. |
12 | See Notes to Financial Statements. |
Eaton Vance
Atlanta Capital Select Equity Fund
Financial Highlights — continued
Class C | ||||||||
Year Ended September 30, 2014 |
Period Ended |
|||||||
Net asset value — Beginning of period |
$ | 14.060 | $ | 12.920 | ||||
Income (Loss) From Operations | ||||||||
Net investment loss(2) |
$ | (0.133 | ) | $ | (0.077 | ) | ||
Net realized and unrealized gain |
1.391 | 1.217 | ||||||
Total income from operations |
$ | 1.258 | $ | 1.140 | ||||
Less Distributions | ||||||||
From net realized gain |
$ | (0.048 | ) | $ | — | |||
Total distributions |
$ | (0.048 | ) | $ | — | |||
Net asset value — End of period |
$ | 15.270 | $ | 14.060 | ||||
Total Return(3) |
8.97 | % | 8.82 | %(4) | ||||
Ratios/Supplemental Data | ||||||||
Net assets, end of period (000’s omitted) |
$ | 9,128 | $ | 4,452 | ||||
Ratios (as a percentage of average daily net assets): |
||||||||
Expenses(5) |
1.95 | % | 1.95 | %(6) | ||||
Net investment loss |
(0.89 | )% | (1.04 | )%(6) | ||||
Portfolio Turnover |
45 | % | 6 | %(7) |
(1) | For the period from the commencement of operations, March 19, 2013, to September 30, 2013. |
(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 and do not reflect the effect of sales charges. |
(4) | Not annualized. |
(5) | The investment adviser, administrator and sub-adviser subsidized certain operating expenses (equal to 0.09% and 0.28% of average daily net assets for the year ended September 30, 2014 and the period from the commencement of operations, March 19, 2013, to September 30, 2013, respectively). Absent this subsidy, total return would have been lower. |
(6) | Annualized. |
(7) | For the Fund’s year ended September 30, 2013. |
13 | See Notes to Financial Statements. |
Eaton Vance
Atlanta Capital Select Equity Fund
Financial Highlights — continued
Class I | ||||||||||||
Year Ended September 30, | Period Ended |
|||||||||||
2014 | 2013 | |||||||||||
Net asset value — Beginning of period |
$ | 14.150 | $ | 11.790 | $ | 10.000 | ||||||
Income (Loss) From Operations | ||||||||||||
Net investment income(2) |
$ | 0.016 | $ | 0.017 | $ | 0.002 | ||||||
Net realized and unrealized gain |
1.402 | 2.385 | 1.788 | |||||||||
Total income from operations |
$ | 1.418 | $ | 2.402 | $ | 1.790 | ||||||
Less Distributions | ||||||||||||
From net investment income |
$ | — | $ | (0.009 | ) | $ | — | |||||
From net realized gain |
(0.048 | ) | (0.033 | ) | — | |||||||
Total distributions |
$ | (0.048 | ) | $ | (0.042 | ) | $ | — | ||||
Net asset value — End of period |
$ | 15.520 | $ | 14.150 | $ | 11.790 | ||||||
Total Return(3) |
10.04 | % | 20.45 | % | 17.90 | %(4) | ||||||
Ratios/Supplemental Data | ||||||||||||
Net assets, end of period (000’s omitted) |
$ | 41,321 | $ | 40,798 | $ | 21,023 | ||||||
Ratios (as a percentage of average daily net assets): |
||||||||||||
Expenses(5) |
0.95 | % | 0.95 | % | 0.95 | %(6) | ||||||
Net investment income |
0.11 | % | 0.13 | % | 0.02 | %(6) | ||||||
Portfolio Turnover |
45 | % | 6 | % | 12 | %(4) |
(1) | For the period from the start of business, January 3, 2012, to September 30, 2012. |
(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) | Not annualized. |
(5) | The investment adviser, administrator and sub-adviser subsidized certain operating expenses (equal to 0.09%, 0.28% and 1.37% of average daily net assets for the years ended September 30, 2014 and 2013 and the period from the start of business, January 3, 2012, to September 30, 2012, respectively). Absent this subsidy, total return would have been lower. |
(6) | Annualized. |
14 | See Notes to Financial Statements. |
Eaton Vance
Atlanta Capital Select Equity Fund
Notes to Financial Statements
1 Significant Accounting Policies
Eaton Vance Atlanta Capital Select Equity Fund (the Fund is a non-diversified series of Eaton Vance Growth Trust (the 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 to seek long-term capital growth. The Fund offers three classes of shares. Class A shares are generally sold subject to a sales charge imposed at time of purchase. Class C shares are sold at net asset value and are generally subject to a contingent deferred sales charge (see Note 5). Class I 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. 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.
Debt Obligations. Short-term obligations purchased with a remaining maturity of sixty days or less are generally valued at amortized cost, which approximates market value.
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). The value of the Fund’s investment in Cash Reserves Fund reflects the Fund’s proportionate interest in its net assets. Cash Reserves Fund generally values its investment securities utilizing the amortized cost valuation technique in accordance with Rule 2a-7 under the 1940 Act. This technique involves initially valuing a portfolio security at its cost and thereafter assuming a constant amortization to maturity of any discount or premium. If amortized cost is determined not to approximate fair value, Cash Reserves Fund may value its investment securities based on available market quotations provided by a third party pricing service.
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. However, if the ex-dividend date has passed, certain dividends from foreign securities are recorded as the Fund is informed of the ex-dividend date. Withholding taxes on foreign dividends and capital gains have been provided for in accordance with the Fund’s understanding of the applicable countries’ tax rules and rates. Interest income is recorded on the basis of interest accrued, adjusted for amortization of premium or accretion of discount.
D Federal Taxes — The 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 September 30, 2014, 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 Expense Reduction — State Street Bank and Trust Company (SSBT) serves as custodian of the Fund. Pursuant to the custodian agreement, SSBT receives a fee reduced by credits, which are determined based on the average daily cash balance the Fund maintains with SSBT. All credit balances, if any, used to reduce the Fund’s custodian fees are reported as a reduction of expenses in the Statement of Operations.
15 |
Eaton Vance
Atlanta Capital Select Equity Fund
Notes to Financial Statements — continued
G Use of Estimates — The preparation of the financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of income and expense during the reporting period. Actual results could differ from those estimates.
H Indemnifications — Under the 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 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.
2 Distributions to Shareholders
It is the present policy of the Fund to make at least one distribution annually (normally in December) 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. The Fund distinguishes between distributions on a tax basis and a financial reporting basis. Accounting principles generally accepted in the United States of America require that only distributions in excess of tax basis earnings and profits be reported in the financial statements as a return of capital. Permanent differences between book and tax accounting relating to distributions are reclassified to paid-in capital. For tax purposes, distributions from short-term capital gains are considered to be from ordinary income.
The tax character of distributions declared for the years ended September 30, 2014 and September 30, 2013 was as follows:
Year Ended September 30, | ||||||||
2014 | 2013 | |||||||
Distributions declared from: |
||||||||
Ordinary income |
$ | 38,251 | $ | 90,892 | ||||
Long-term capital gains |
$ | 280,949 | $ | — |
During the year ended September 30, 2014, accumulated net realized gain was decreased by $490,281, accumulated net investment loss was decreased by $101,273 and paid-in capital was increased by $389,008 due to the Fund’s use of equalization accounting and differences between book and tax accounting, primarily for investments in partnerships and net operating losses. Tax equalization accounting allows the Fund to treat as a distribution that portion of redemption proceeds representing a redeeming shareholder’s portion of undistributed taxable income and net capital gains. These reclassifications had no effect on the net assets or net asset value per share of the Fund.
As of September 30, 2014, the components of distributable earnings (accumulated losses) and unrealized appreciation (depreciation) on a tax basis were as follows:
Undistributed ordinary income |
$ | 182,091 | ||
Undistributed long-term capital gains |
$ | 1,134,336 | ||
Net unrealized appreciation |
$ | 15,305,510 |
The differences between components of distributable earnings (accumulated losses) on a tax basis and the amounts reflected in the Statement of Assets and Liabilities are primarily due to wash sales, investments in partnerships and the tax treatment of short-term capital gains.
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. The fee is computed at an annual rate of 0.80% of the Fund’s average daily net assets up to $500 million and is payable monthly. On net assets of $500 million and over, the annual fee is reduced. For the year ended September 30, 2014, the investment adviser and administration fee amounted to $818,200 or 0.80% of the Fund’s average daily net assets. Pursuant to a sub-advisory agreement, EVM pays Atlanta Capital Management Company, LLC
16 |
Eaton Vance
Atlanta Capital Select Equity Fund
Notes to Financial Statements — continued
(Atlanta Capital), an affiliate of EVM, a portion of its 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 Atlanta Capital have agreed to reimburse the Fund’s expenses to the extent that total annual operating expenses (relating to ordinary operating expenses only) exceed 1.20%, 1.95% and 0.95% of the Fund’s average daily net assets for Class A, Class C and Class I, respectively. This agreement may be changed or terminated after January 31, 2015. Pursuant to this agreement, EVM and Atlanta Capital were allocated $90,829 in total of the Fund’s operating expenses for the year ended September 30, 2014.
EVM provides sub-transfer agency and related services to the Fund pursuant to a Sub-Transfer Agency Support Services Agreement. For the year ended September 30, 2014, EVM earned $2,338 from the Fund pursuant to such agreement, which is included in transfer and dividend disbursing agent fees on the Statement of Operations. The Fund was informed that Eaton Vance Distributors, Inc. (EVD), an affiliate of EVM and the Fund’s principal underwriter, received $34,064 as its portion of the sales charge on sales of Class A shares for the year ended September 30, 2014. EVD also received distribution and service fees from Class A and Class C shares (see Note 4) and contingent deferred sales charges (see Note 5).
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 year ended September 30, 2014, no significant amounts have been deferred. Certain officers and Trustees of the Fund are officers of EVM.
4 Distribution Plans
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 year ended September 30, 2014 amounted to $115,766 for Class A shares.
The Fund also has in effect a distribution plan for Class C shares (Class C Plan) pursuant to Rule 12b-1 under the 1940 Act. Pursuant to the Class C Plan, the Fund pays EVD amounts equal to 0.75% per annum of its average daily net assets attributable to Class C shares for providing ongoing distribution services and facilities to the Fund. For the year ended September 30, 2014, the Fund paid or accrued to EVD $59,451 for Class C shares.
Pursuant to the Class C Plan, the Fund also makes payments of service fees to EVD, financial intermediaries and other persons in amounts equal to 0.25% per annum of its average daily net assets attributable to that class. Service fees paid or accrued are for personal services and/or the maintenance of shareholder accounts. They are separate and distinct from the sales commissions and distribution fees payable to EVD. Service fees paid or accrued for the year ended September 30, 2014 amounted to $19,817 for Class C shares.
Distribution and service fees are subject to the limitations contained in the Financial Industry Regulatory Authority’s NASD Conduct Rule 2830(d).
5 Contingent Deferred Sales Charges
A contingent deferred sales charge (CDSC) of 1% generally is imposed on redemptions of Class C shares made within one year of purchase. Class A shares may be subject to a 1% CDSC if redeemed within 18 months of purchase (depending on the circumstances of purchase). 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 year ended September 30, 2014, the Fund was informed that EVD received approximately $1,000 and $1,000 of CDSCs paid by Class A and Class C shareholders, respectively.
6 Purchases and Sales of Investments
Purchases and sales of investments, other than short-term obligations, aggregated $68,463,895 and $41,893,166, respectively, for the year ended September 30, 2014.
17 |
Eaton Vance
Atlanta Capital Select Equity Fund
Notes to Financial Statements — 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:
Year Ended September 30, | ||||||||
Class A | 2014 | 2013 | ||||||
Sales |
2,826,535 | 1,872,171 | ||||||
Issued to shareholders electing to receive payments of distributions in Fund shares |
8,297 | 734 | ||||||
Redemptions |
(1,302,819 | ) | (268,446 | ) | ||||
Net increase |
1,532,013 | 1,604,459 | ||||||
Year Ended September 30, | ||||||||
Class C | 2014 | 2013(1) | ||||||
Sales |
384,127 | 331,208 | ||||||
Issued to shareholders electing to receive payments of distributions in Fund shares |
1,457 | — | ||||||
Redemptions |
(104,368 | ) | (14,543 | ) | ||||
Net increase |
281,216 | 316,665 | ||||||
Year Ended September 30, | ||||||||
Class I | 2014 | 2013 | ||||||
Sales |
2,583,463 | 1,205,967 | ||||||
Issued to shareholders electing to receive payments of distributions in Fund shares |
4,337 | 817 | ||||||
Redemptions |
(2,807,875 | ) | (106,910 | ) | ||||
Net increase (decrease) |
(220,075 | ) | 1,099,874 |
(1) | Class C commenced operations on March 19, 2013. |
8 Federal Income Tax Basis of Investments
The cost and unrealized appreciation (depreciation) of investments of the Fund at September 30, 2014, as determined on a federal income tax basis, were as follows:
Aggregate cost |
$ | 89,709,201 | ||
Gross unrealized appreciation |
$ | 15,334,725 | ||
Gross unrealized depreciation |
(29,215 | ) | ||
Net unrealized appreciation |
$ | 15,305,510 |
9 Line of Credit
The Fund participates with other portfolios and funds managed by EVM and its affiliates in a $750 million unsecured line of credit agreement with a group of banks. 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 0.08% 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 year ended September 30, 2014.
18 |
Eaton Vance
Atlanta Capital Select Equity Fund
Notes to Financial Statements — continued
10 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.
ź | Level 1 – quoted prices in active markets for identical investments |
ź | Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.) |
ź | 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 September 30, 2014, 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 |
$ | 97,328,233 | * | $ | — | $ | — | $ | 97,328,233 | |||||||
Exchange-Traded Funds |
4,570,396 | — | — | 4,570,396 | ||||||||||||
Short-Term Investments |
— | 3,116,082 | — | 3,116,082 | ||||||||||||
Total Investments |
$ | 101,898,629 | $ | 3,116,082 | $ | — | $ | 105,014,711 |
* | The level classification by major category of investments is the same as the category presentation in the Portfolio of Investments. |
The Fund held no investments or other financial instruments as of September 30, 2013 whose fair value was determined using Level 3 inputs. At September 30, 2014, there were no investments transferred between Level 1 and Level 2 during the year then ended.
19 |
Eaton Vance
Atlanta Capital Select Equity Fund
Report of Independent Registered Public Accounting Firm
To the Trustees of Eaton Vance Growth Trust and Shareholders of Eaton Vance Atlanta Capital Select Equity Fund:
We have audited the accompanying statement of assets and liabilities of Eaton Vance Atlanta Capital Select Equity Fund (the “Fund”) (one of the funds constituting Eaton Vance Growth Trust), including the portfolio of investments, as of September 30, 2014, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the periods presented. These financial statements and financial highlights are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. The Fund is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Fund’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of September 30, 2014, by correspondence with the custodian and brokers; where replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Eaton Vance Atlanta Capital Select Equity Fund as of September 30, 2014, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the periods presented, in conformity with accounting principles generally accepted in the United States of America.
DELOITTE & TOUCHE LLP
Boston, Massachusetts
20 |
Eaton Vance
Atlanta Capital Select Equity Fund
Federal Tax Information (Unaudited)
The Form 1099-DIV you receive in February 2015 will show the tax status of all distributions paid to your account in calendar year 2014. Shareholders are advised to consult their own tax adviser with respect to the tax consequences of their investment in the Fund. As required by the Internal Revenue Code and/or regulations, shareholders must be notified regarding the status of qualified dividend income for individuals, the dividends received deduction for corporations and capital gains dividends.
Qualified Dividend Income. For the fiscal year ended September 30, 2014, the Fund designates approximately $1,060,174, or up to the maximum amount of such dividends allowable pursuant to the Internal Revenue Code, as qualified dividend income eligible for the reduced tax rate of 15%.
Dividends Received Deduction. Corporate shareholders are generally entitled to take the dividends received deduction on the portion of the Fund’s dividend distribution that qualifies under tax law. For the Fund’s fiscal 2014 ordinary income dividends, 100% qualifies for the corporate dividends received deduction.
Capital Gains Dividends. The Fund hereby designates as a capital gain dividend with respect to the taxable year ended September 30, 2014, $1,750,485 or, if subsequently determined to be different, the net capital gain of such year.
21 |
Eaton Vance
Atlanta Capital Select Equity Fund
Special Meeting of Shareholders (Unaudited)
The Fund held a Special Meeting of Shareholders on May 29, 2014 to elect five Trustees. The results of the vote were as follows:
Number of Shares(1) | ||||||||
Nominee for Trustee | For | Withheld | ||||||
Scott E. Eston |
7,090,445 | 21,824 | ||||||
Cynthia E. Frost |
7,090,445 | 21,824 | ||||||
George J. Gorman |
7,090,445 | 21,824 | ||||||
Valerie A. Mosley |
7,090,445 | 21,824 | ||||||
Harriett Tee Taggart |
7,090,445 | 21,824 |
(1) | Excludes fractional shares. |
22 |
Eaton Vance
Atlanta Capital Select Equity Fund
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 Eaton Vance group of mutual funds (the “Eaton Vance Funds”) held on April 28, 2014, the Board, including a majority of the Independent Trustees, voted to approve continuation of existing advisory and sub-advisory agreements for the Eaton Vance Funds for an additional one-year period. In voting its approval, the Board relied upon the affirmative recommendation of the Contract Review Committee of the Board, 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 2014, as well as information considered throughout the year at meetings of the Board and its committees. Such information included, among other things, the following:
Information about Fees, Performance and Expenses
ź | An independent report comparing the advisory and related fees paid by each fund with fees paid by comparable funds; |
ź | An independent report comparing each fund’s total expense ratio and its components to comparable funds; |
ź | An independent report 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; |
ź | Data regarding investment performance in comparison to benchmark indices and customized peer groups identified by the adviser in consultation with the Board; |
ź | 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; |
ź | Profitability analyses for each adviser with respect to each fund; |
Information about Portfolio Management and Trading
ź | Descriptions of the investment management services provided to each fund, including the investment strategies and processes employed, and any changes in portfolio management processes and personnel; |
ź | Information about the allocation of brokerage and the benefits received by each adviser as a result of brokerage allocation, including information concerning the acquisition of research through client commission arrangements and the fund’s policies with respect to “soft dollar” arrangements; |
ź | Data relating to portfolio turnover rates of each fund; |
ź | 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; |
ź | Information about each adviser’s processes for monitoring best execution of portfolio transactions, and other policies and practices of each adviser with respect to trading; |
Information about each Adviser
ź | Reports detailing the financial results and condition of each adviser; |
ź | Descriptions of the qualifications, education and experience of the individual investment professionals whose responsibilities include portfolio management and investment research for the funds, and information relating to their compensation and responsibilities with respect to managing other mutual funds and investment accounts; |
ź | Copies of the Codes of Ethics of each adviser and its affiliates, together with information relating to compliance with and the administration of such codes; |
ź | Copies of or descriptions of each adviser’s policies and procedures relating to proxy voting, the handling of corporate actions and class actions; |
ź | Information concerning the resources devoted to compliance efforts undertaken by each adviser and its affiliates on behalf of the funds (including descriptions of various compliance programs) and their record of compliance with investment policies and restrictions, including policies with respect to market-timing, late trading and selective portfolio disclosure, and with policies on personal securities transactions; |
ź | Descriptions of the business continuity and disaster recovery plans of each adviser and its affiliates; |
ź | 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; |
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Eaton Vance
Atlanta Capital Select Equity Fund
Board of Trustees’ Contract Approval — continued
Other Relevant Information
ź | Information concerning the nature, cost and character of the administrative and other non-investment management services provided by Eaton Vance Management and its affiliates; |
ź | Information concerning management of the relationship with the custodian, subcustodians and fund accountants by each adviser or the funds’ administrator; and |
ź | The terms of each advisory agreement. |
Over the course of the twelve-month period ended April 30, 2014, with respect to one or more funds, the Board met nine 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, seventeen, eleven, six and ten times respectively. At such meetings, the Trustees participated in investment and performance reviews with the portfolio managers and other investment professionals of each adviser relating to each fund, and considered the investment and trading strategies used in pursuing each fund’s investment objective, including, where relevant, the use of derivative instruments, as well as processes for monitoring best execution of portfolio transactions and 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.
For funds that invest through one or more underlying portfolios, the Board considered similar information about the portfolio(s) when considering the approval of advisory agreements. In addition, in cases where the 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, legal counsel for the Independent Trustees. The members of the Contract Review Committee relied upon the advice of such counsel and their own business judgment in determining the material factors to be considered in evaluating each advisory and sub-advisory agreement and the weight to be given to each such factor. The conclusions reached with respect to each advisory and sub-advisory agreement were based on a comprehensive evaluation of all the information provided and not any single factor. Moreover, each member of the Contract Review Committee may have placed varying emphasis on particular factors in reaching conclusions with respect to each advisory and sub-advisory agreement. In evaluating each 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 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 Eaton Vance Atlanta Capital Select Equity Fund (the “Fund”), with Eaton Vance Management (the “Adviser”), and the sub-advisory agreement with Atlanta Capital Management Company, 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 as well as the 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 supervising the Sub-adviser. With respect to the Sub-Adviser, the Board took into account the resources available to the Sub-Adviser in fulfilling its duties under the sub-advisory agreement and the Sub-Adviser’s abilities and experience in implementing the Fund’s investment strategy. In particular, the Board evaluated, where relevant, the abilities and experience of such personnel in making investments in equity securities, including both U.S. and foreign common stocks. The Board also took into account the resources dedicated to portfolio management and other services, including the compensation methods of the Adviser to recruit and retain investment personnel, and the time and attention devoted to the Fund by senior management.
The Board reviewed 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 personnel, selective disclosure of portfolio holdings, late trading, frequent trading, portfolio valuation, business continuity and the allocation of investment opportunities. The Board also evaluated the responses of the Adviser and its affiliates to requests in recent years from regulatory authorities such as the Securities and Exchange Commission and the Financial Industry Regulatory Authority.
24 |
Eaton Vance
Atlanta Capital Select Equity Fund
Board of Trustees’ Contract Approval — continued
The Board considered shareholder and other administrative services provided or managed by Eaton Vance Management and its affiliates, including transfer agency and accounting services. The Board evaluated the benefits to shareholders of investing in a fund that is a part of a large family of funds, including 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 a relevant universe of similarly managed funds identified by an independent data provider and appropriate benchmark indices. The Board reviewed comparative performance data for the one-year period ended September 30, 2013 for the Fund. In light of the Fund’s relatively brief operating history, the Board concluded that additional time is required to evaluate Fund performance.
Management Fees and Expenses
The Board reviewed contractual fee rates for investment advisory and administrative services payable and by the Fund (referred to as “management fees”). As part of its review, the Board considered the management fees and the Fund’s total expense ratio for the year ended September 30, 2013, as compared to a group of similarly managed funds selected by an independent data provider. The Board noted that the Adviser had waived fees and/or paid expenses for the Fund. The Board also considered factors that had an impact on Fund expense ratios, as identified by management in response to inquiries from the Contract Review Committee, as well as actions taken by management in recent years to reduce expenses at the fund complex level, including the negotiation of reduced fees for transfer agency and custody services.
After reviewing 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
The Board reviewed 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 revenue sharing or other payments by the Adviser and its affiliates to third parties in respect of distribution services. The Board also considered other direct or indirect benefits received by the Adviser and its affiliates, 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 reasonable.
Economies of Scale
In reviewing management fees and profitability, the Board also considered the extent to which the Adviser and its affiliates, on the one hand, and the Fund, on the other hand, can expect to realize benefits from economies of scale as the assets of the Fund increase. The Board acknowledged the difficulty in accurately measuring the benefits resulting from the economies of scale with respect to the management of any specific fund or group of funds. The Board 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. 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 economies of scale in the future.
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Eaton Vance
Atlanta Capital Select Equity Fund
Management and Organization
Fund Management. The Trustees of Eaton Vance Growth Trust (the Trust) are responsible for the overall management and supervision of the Trust’s affairs. The Trustees and officers of the Trust are listed below. Except as indicated, each individual has held the office shown or other offices in the same company for the last five years. Trustees and officers of the Trust hold indefinite terms of office. The “Noninterested Trustees” consist of those Trustees who are not “interested persons” of the Trust, as that term is defined under the 1940 Act. The business address of each Trustee and officer is Two International Place, Boston, Massachusetts 02110. As used below, “EVC” refers to Eaton Vance Corp., “EV” refers to Eaton Vance, Inc., “EVM” refers to Eaton Vance Management, “BMR” refers to Boston Management and Research and “EVD” refers to Eaton Vance Distributors, Inc. EVC and EV are the corporate parent and trustee, respectively, of EVM and BMR. EVD is the Fund’s principal underwriter and a wholly-owned subsidiary of EVC. Each officer affiliated with Eaton Vance may hold a position with other Eaton Vance affiliates that is comparable to his or her position with EVM listed below. Each Trustee oversees 182 portfolios in the Eaton Vance Complex (including all master and feeder funds in a master feeder structure). Each officer serves as an officer of certain other Eaton Vance funds. Each Trustee and officer serves until his or her successor is elected.
Name and Year of Birth | Position(s) with the |
Trustee Since(1) |
Principal Occupation(s) and Directorships During Past Five Years and Other Relevant Experience | |||
Interested Trustee |
||||||
Thomas E. Faust Jr. 1958 |
Trustee | 2007 | Chairman, Chief Executive Officer and President of EVC, Director and President of EV, Chief Executive Officer and President of EVM and BMR, and Director of EVD. Trustee and/or officer of 182 registered investment companies. Mr. Faust is an interested person because of his positions with EVM, BMR, EVD, EVC and EV, which are affiliates of the Trust. Directorships in the Last Five Years.(2) Director of EVC and Hexavest Inc. | |||
Noninterested Trustees |
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Scott E. Eston 1956 |
Trustee | 2011 | Private investor. Formerly held various positions at Grantham, Mayo, Van Otterloo and Co., L.L.C. (investment management firm) (1997-2009), including Chief Operating Officer (2002-2009), Chief Financial Officer (1997-2009) and Chairman of the Executive Committee (2002-2008); President and Principal Executive Officer, GMO Trust (open-end registered investment company) (2006-2009). Former Partner, Coopers and Lybrand L.L.P. (now PricewaterhouseCoopers) (public accounting firm) (1987-1997). Directorships in the Last Five Years.(2) None. | |||
Cynthia E. Frost(3) 1961 |
Trustee | 2014 | Private investor. Formerly, Chief Investment Officer of Brown University (university endowment) (2000-2012); Portfolio Strategist for Duke Management Company (university endowment manager) (1995-2000); Managing Director, Cambridge Associates (1989-1995); Consultant, Bain and Company (1987-1989); Senior Equity Analyst, BA Investment Management Company (1983-1985). Directorships in the Last Five Years. None. | |||
George J. Gorman(3) 1952 |
Trustee | 2014 | Principal at George J. Gorman LLC (consulting firm). Formerly, Senior Partner at Ernst & Young LLP (public accounting firm) (1974-2009). Directorships in the Last Five Years. Formerly, Trustee of the Bank of America Money Market Funds Series Trust (2011-2014) and of the Ashmore Funds (2010-2014). | |||
Valerie A. Mosley(4) 1960 |
Trustee | 2014 | Chairwoman and Chief Executive Officer of Valmo Ventures (a consulting and investment firm). Former Partner and Senior Vice President, Portfolio Manager and Investment Strategist at Wellington Management Company, LLP (investment management firm) (1992-2012). Former Chief Investment Officer, PG Corbin Asset Management (1990-1992). Formerly worked in institutional corporate bond sales at Kidder Peabody (1986-1990). Directorships in the Last Five Years.(2) Director of Dynex Capital, Inc. (mortgage REIT) (since 2013). | |||
William H. Park 1947 |
Trustee | 2003 | Consultant and private investor. Formerly, Chief Financial Officer, Aveon Group L.P. (investment management firm) (2010-2011). Formerly, Vice Chairman, Commercial Industrial Finance Corp. (specialty finance company) (2006-2010). Formerly, President and Chief Executive Officer, Prizm Capital Management, LLC (investment management firm) (2002-2005). Formerly, Executive Vice President and Chief Financial Officer, United Asset Management Corporation (investment management firm) (1982-2001). Formerly, Senior Manager, Price Waterhouse (now PricewaterhouseCoopers) (an independent registered public accounting firm) (1972-1981). Directorships in the Last Five Years.(2) None. |
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Eaton Vance
Atlanta Capital Select Equity Fund
Management and Organization — continued
Name and Year of Birth | Position(s) with the |
Trustee Since(1) |
Principal Occupation(s) and Directorships During Past Five Years and Other Relevant Experience | |||
Noninterested Trustees (continued) |
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Ronald A. Pearlman 1940 |
Trustee | 2003 | Lawyer and consultant. Formerly, Professor of Law, Georgetown University Law Center (1999-2014). Formerly, Partner, Covington & Burling LLP (law firm) (1991-2000). Formerly, Chief of Staff, Joint Committee on Taxation, U.S. Congress (1988-1990). Formerly, Deputy Assistant Secretary (Tax Policy) and Assistant Secretary (Tax Policy), U.S. Department of the Treasury (1983-1985). Directorships in the Last Five Years.(2) None. | |||
Helen Frame Peters 1948 |
Trustee | 2008 | Professor of Finance, Carroll School of Management, Boston College. Formerly, Dean, Carroll School of Management, Boston College (2000-2002). Formerly, Chief Investment Officer, Fixed Income, Scudder Kemper Investments (investment management firm) (1998-1999). Formerly, Chief Investment Officer, Equity and Fixed Income, Colonial Management Associates (investment management firm) (1991-1998). Directorships in the Last Five Years.(2) Formerly, Director of BJ’s Wholesale Club, Inc. (wholesale club retailer) (2004-2011). Formerly, Trustee of SPDR Index Shares Funds and SPDR Series Trust (exchange traded funds) (2000-2009). Formerly, Director of Federal Home Loan Bank of Boston (a bank for banks) (2007-2009). | |||
Harriett Tee Taggart 1948 |
Trustee | 2011 | Managing Director, Taggart Associates (a professional practice firm). Formerly, Partner and Senior Vice President, Wellington Management Company, LLP (investment management firm) (1983-2006). Directorships in the Last Five Years.(2) Director of Albemarle Corporation (chemicals manufacturer) (since 2007) and The Hanover Group (specialty property and casualty insurance company) (since 2009). Formerly, Director of Lubrizol Corporation (specialty chemicals) (2007-2011). | |||
Ralph F. Verni 1943 |
Chairman of the Board and Trustee |
2007 (Chairman) 2005 (Trustee) |
Consultant and private investor. Formerly, Chief Investment Officer (1982-1992), Chief Financial Officer (1988-1990) and Director (1982-1992), New England Life. Formerly, Chairperson, New England Mutual Funds (1982-1992). Formerly, President and Chief Executive Officer, State Street Management & Research (1992-2000). Formerly, Chairperson, State Street Research Mutual Funds (1992-2000). Formerly, Director, W.P. Carey, LLC (1998-2004) and First Pioneer Farm Credit Corp. (2002-2006). Directorships in the Last Five Years.(2) None. | |||
Principal Officers who are not Trustees | ||||||
Name and Year of Birth | Position(s) with the Trust |
Officer Since(5) | Principal Occupation(s) During Past Five Years | |||
1956 |
President | 2003 | Vice President and Chief Income Investment Officer of EVM and BMR. | |||
Maureen A. Gemma 1960 |
Vice President, Secretary and Chief Legal Officer | 2005 | Vice President of EVM and BMR. | |||
1967 |
Treasurer | 2007 | Vice President of EVM and BMR. | |||
Paul M. O’Neil 1953 |
Chief Compliance Officer | 2004 | Vice President of EVM and BMR. |
(1) | Year first appointed to serve as Trustee for a fund in the Eaton Vance family of funds. Each Trustee has served continuously since appointment unless indicated otherwise. |
(2) | During their respective tenures, the Trustees (except for Ms. Frost and Mr. Gorman) also served as Board members of one or more of the following funds (which operated in the years noted): eUnitsTM 2 Year U.S. Market Participation Trust: Upside to Cap / Buffered Downside (launched in 2012 and terminated in 2014); eUnitsTM 2 Year U.S. Market Participation Trust II: Upside to Cap / Buffered Downside (launched in 2012 and terminated in 2014); Eaton Vance Credit Opportunities Fund (launched in 2005 and terminated in 2010); Eaton Vance Insured Florida Plus Municipal Bond Fund (launched in 2002 and terminated in 2009); and Eaton Vance National Municipal Income Trust (launched in 1998 and terminated in 2009). However, Ms. Mosley did not serve as a Board member of eUnitsTM 2 Year U.S. Market Participation Trust: Upside to Cap / Buffered Downside (launched in 2012 and terminated in 2014). |
27 |
Eaton Vance
Atlanta Capital Select Equity Fund
Management and Organization — continued
(3) | Ms. Frost and Mr. Gorman began serving as Trustees effective May 29, 2014. |
(4) | Ms. Mosley began serving as a Trustee effective January 1, 2014. |
(5) | Year first elected to serve as officer of a fund in the Eaton Vance family of funds when the officer has served continuously. Otherwise, year of most recent election as an officer of a fund in the Eaton Vance family of funds. Titles may have changed since initial election. |
The SAI for the Fund includes additional information about the Trustees and officers of the Fund and can be obtained without charge on Eaton Vance’s website at www.eatonvance.com or by calling 1-800-262-1122.
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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:
ź | 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. |
ź | 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. |
ź | Policies and procedures (including physical, electronic and procedural safeguards) are in place that are designed to protect the confidentiality of such information. |
ź | 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’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 1-800-262-1122, or contact your financial advisor. Your instructions that householding not apply to delivery of your Eaton Vance documents will be effective within 30 days of receipt by Eaton Vance or your financial 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 1-800-262-1122 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 1-800-262-1122 and by accessing the SEC’s website at www.sec.gov.
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Investment Adviser and Administrator
Eaton Vance Management
Two International Place
Sub-Adviser
Atlanta Capital Management Company, LLC
1075 Peachtree Street NE
Suite 2100
Principal Underwriter*
Eaton Vance Distributors, Inc.
Two International Place
(617) 482-8260
Custodian
State Street Bank and Trust Company
State Street Financial Center, One Lincoln Street
Transfer Agent
BNY Mellon Investment Servicing (US) Inc.
Attn: Eaton Vance Funds
P.O. Box 9653
Providence, RI 02940-9653
(800) 262-1122
Independent Registered Public Accounting Firm
Deloitte & Touche LLP
200 Berkeley Street
Fund Offices
Two International Place
* | 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. |
5748 9.30.14 |
Item 2. Code of Ethics
The registrant has adopted a code of ethics applicable to its Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer. The registrant undertakes to provide a copy of such code of ethics to any person upon request, without charge, by calling 1-800-262-1122.
Item 3. Audit Committee Financial Expert
The registrant’s Board has designated William H. Park, an independent trustee, as its audit committee financial expert. Mr. Park is a certified public accountant who is a consultant and private investor. Previously, he served as the Chief Financial Officer of Aveon Group, L.P. (an investment management firm), as the Vice Chairman of Commercial Industrial Finance Corp. (specialty finance company), as President and Chief Executive Officer of Prizm Capital Management, LLC (investment management firm), as Executive Vice President and Chief Financial Officer of United Asset Management Corporation (an institutional investment management firm) and as a Senior Manager at Price Waterhouse (now PricewaterhouseCoopers) (an independent registered public accounting firm).
Item 4. Principal Accountant Fees and Services
(a)-(d)
Eaton Vance Atlanta Capital Focused Growth Fund, Eaton Vance Atlanta Capital Select Equity Fund and Eaton Vance Atlanta Capital SMID-Cap Fund, (the “Fund(s)”) are series of Eaton Vance Growth Trust (the “Trust”), a Massachusetts business trust, which, including the Funds, contains a total of 18 series (the “Series”). The Trust is registered under the Investment Company Act of 1940 as an open-end management investment company. This Form N-CSR relates to the Funds’ annual reports.
The following table presents the aggregate fees billed to the registrant for the registrant’s fiscal years ended September 30, 2013 and September 30, 2014 by the registrant’s principal accountant, Deloitte & Touche LLP (“D&T”), for professional services rendered for the audit of the registrant’s annual financial statements and fees billed for other services rendered by D&T during such periods.
Eaton Vance Atlanta Capital Focused Growth Fund
Fiscal Years Ended |
9/30/13 | 9/30/14 | ||||||
Audit Fees |
$ | 25,970 | $ | 26,770 | ||||
Audit-Related Fees(1) |
$ | 0 | $ | 0 | ||||
Tax Fees(2) |
$ | 9,900 | $ | 12,460 | ||||
All Other Fees(3) |
$ | 0 | $ | 0 | ||||
|
|
|
|
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Total |
$ | 35,870 | $ | 39,230 | ||||
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|
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Eaton Vance Atlanta Capital Select Equity Fund
Fiscal Years Ended |
9/30/13 | 9/30/14 | ||||||
Audit Fees |
$ | 26,620 | $ | 26,220 | ||||
Audit-Related Fees(1) |
$ | 0 | $ | 0 | ||||
Tax Fees(2) |
$ | 8,410 | $ | 10,410 | ||||
All Other Fees(3) |
$ | 0 | $ | 0 | ||||
|
|
|
|
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Total |
$ | 35,030 | $ | 36,630 | ||||
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Eaton Vance Atlanta Capital SMID-Cap Fund
Fiscal Years Ended |
9/30/13 | 9/30/14 | ||||||
Audit Fees |
$ | 21,490 | $ | 22,190 | ||||
Audit-Related Fees(1) |
$ | 0 | $ | 0 | ||||
Tax Fees(2) |
$ | 8,400 | $ | 11,220 | ||||
All Other Fees(3) |
$ | 0 | $ | 0 | ||||
|
|
|
|
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Total |
$ | 29,890 | $ | 33,410 | ||||
|
|
|
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(1) | Audit-related fees consist of the aggregate fees billed for assurance and related services that are reasonably related to the performance of the audit of the registrant’s financial statements and are not reported under the category of audit fees. |
(2) | Tax fees consist of the aggregate fees billed for professional services rendered by the principal accountant relating to tax compliance, tax advice, and tax planning and specifically include fees for tax return preparation and other related tax compliance/planning matters. |
(3) | All other fees consist of the aggregate fees billed for products and services provided by the principal accountant other than audit, audit-related, and tax services. |
The various Series comprising the Trust have differing fiscal year ends (February 28, July 31, August 31, or September 30). The following table presents the aggregate audit, audit-related, tax, and other fees billed to all of the Series in the Trust by D&T for the last two fiscal years of each Series.
Fiscal Years Ended |
2/28/13 | 7/31/13 | 8/31/13 | 9/30/13 | 2/28/14 | 7/31/14 | 8/31/14 | 9/30/14 | ||||||||||||||||||||||||
Audit Fees |
$ | 52,410 | $ | 93,300 | $ | 202,330 | $ | 74,080 | $ | 56,010 | $ | 111,100 | $ | 273,050 | $ | 75,180 | ||||||||||||||||
Audit-Related Fees(1) |
$ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||||||||||
Tax Fees(2) |
$ | 25,330 | $ | 43,030 | $ | 62,840 | $ | 26,710 | $ | 25,630 | $ | 45,535 | $ | 105,240 | $ | 34,090 | ||||||||||||||||
All Other Fees(3) |
$ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||||||||||
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Total |
$ | 77,740 | $ | 136,330 | $ | 265,170 | $ | 100,790 | $ | 81,640 | $ | 156,635 | $ | 378,290 | $ | 109,270 | ||||||||||||||||
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(1) | Audit-related fees consist of the aggregate fees billed for assurance and related services that are reasonably related to the performance of the audit of the registrant’s financial statements and are not reported under the category of audit fees. |
(2) | Tax fees consist of the aggregate fees billed for professional services rendered by the principal accountant relating to tax compliance, tax advice, and tax planning and specifically include fees for tax return preparation and other related tax compliance/planning matters. |
(3) | All other fees consist of the aggregate fees billed for products and services provided by the principal accountant other than audit, audit-related, and tax services. |
(e)(1) The registrant’s audit committee has adopted policies and procedures relating to the pre-approval of services provided by the registrant’s principal accountant (the “Pre-Approval Policies”). The Pre-Approval Policies establish a framework intended to assist the audit committee in the proper
discharge of its pre-approval responsibilities. As a general matter, the Pre-Approval Policies (i) specify certain types of audit, audit-related, tax, and other services determined to be pre-approved by the audit committee; and (ii) delineate specific procedures governing the mechanics of the pre-approval process, including the approval and monitoring of audit and non-audit service fees. Unless a service is specifically pre-approved under the Pre-Approval Policies, it must be separately pre-approved by the audit committee.
The Pre-Approval Policies and the types of audit and non-audit services pre-approved therein must be reviewed and ratified by the registrant’s audit committee at least annually. The registrant’s audit committee maintains full responsibility for the appointment, compensation, and oversight of the work of the registrant’s principal accountant.
(e)(2) No services described in paragraphs (b)-(d) above were approved by the registrant’s audit committee pursuant to the “de minimis exception” set forth in Rule 2-01(c)(7)(i)(C) of Regulation S-X.
(f) | Not applicable. |
(g) The following table presents (i) the aggregate non-audit fees (i.e., fees for audit-related, tax, and other services) billed for services rendered to all of the Series in the Trust by D&T for the last two fiscal years of each Series; and (ii) the aggregate non-audit fees (i.e., fees for audit-related, tax, and other services) billed for services rendered to the Eaton Vance organization by D&T for the last 2 fiscal years of each Series.
Fiscal Years Ended |
2/28/13 | 7/31/13 | 8/31/13 | 9/30/13 | 2/28/14 | 7/31/14 | 8/31/14 | 9/30/14 | ||||||||||||||||||||||||
Registrant(1) |
$ | 25,330 | $ | 43,030 | $ | 62,840 | $ | 26,710 | $ | 25,630 | $ | 45,535 | $ | 105,240 | $ | 34,090 | ||||||||||||||||
Eaton Vance(2) |
$ | 544,549 | $ | 276,151 | $ | 417,309 | $ | 369,820 | $ | 370,325 | $ | 397,473 | $ | 256,315 | $ | 256,315 |
(1) | Includes all of the Series of the Trust. |
(2) | During the fiscal years reported above, the Series were “feeder” funds in a “master-feeder” fund structure. Various subsidiaries of Eaton Vance Corp. act in either an investment advisory and/or service provider capacity with respect to the Series and/or their respective “master” funds (if applicable). |
(h) The registrant’s audit committee has considered whether the provision by the registrant’s principal accountant of non-audit services to the registrant’s investment adviser and any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant that were not pre-approved pursuant to Rule 2-01(c)(7)(ii) of Regulation S-X is compatible with maintaining the principal accountant’s independence.
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. 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 Growth Trust | ||
By: | ||
Payson F. Swaffield | ||
President | ||
Date: | November 12, 2014 |
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: |
||
James F. Kirchner | ||
Treasurer | ||
Date: | November 12, 2014 |
By: |
||
Payson F. Swaffield | ||
President | ||
Date: | November 12, 2014 |
This ‘N-CSR’ Filing | Date | Other Filings | ||
---|---|---|---|---|
1/31/15 | ||||
Filed on / Effective on: | 11/25/14 | 497K | ||
11/19/14 | ||||
11/12/14 | ||||
For Period End: | 9/30/14 | |||
7/1/14 | 485BPOS | |||
5/29/14 | DEF 14A, N-CSRS | |||
5/1/14 | 485APOS | |||
4/30/14 | N-Q | |||
4/28/14 | N-CSR, N-CSRS, NSAR-A, NSAR-B | |||
4/1/14 | 497 | |||
3/31/14 | 485APOS, N-CSRS, NSAR-A | |||
1/1/14 | 485BPOS | |||
9/30/13 | 24F-2NT, N-CSR, NSAR-B | |||
3/19/13 | 485BPOS, 497K | |||
1/15/13 | ||||
12/31/12 | 24F-2NT/A, N-Q | |||
9/30/12 | 24F-2NT, 24F-2NT/A, N-CSR, NSAR-B, NSAR-B/A | |||
7/23/12 | ||||
1/3/12 | ||||
9/30/11 | 24F-2NT, 485BPOS, 497, 497K, N-CSR, NSAR-B | |||
5/2/11 | 485BPOS, 497K | |||
9/30/10 | 24F-2NT, N-CSR, NSAR-B | |||
10/1/09 | ||||
List all Filings |