SEC Form N-CSRS filed by Eaton Vance Corporation Eaton Vance Tax-Managed Buy-Write Oppo
$ETV
Investment Bankers/Brokers/Service
Finance
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act File Number:
811-21735
Tax-Managed
Buy-Write
Opportunities Fund(Exact Name of Registrant as Specified in Charter)
One Post Office Square, Boston,
Massachusetts 02109
(Address of Principal Executive Offices)
Deidre E. Walsh
One Post Office Square, Boston,
Massachusetts 02109
(Name and Address of Agent for Services)
(617)
482-8260
(Registrant’s Telephone Number)
December 31
Date of Fiscal Year End
June 30, 2024
Date of Reporting Period
Item 1. Reports to Stockholders
Eaton Vance
Tax-Managed Buy-Write Opportunities Fund (ETV)
Semi-Annual Report
June 30, 2024
Commodity Futures Trading Commission Registration.
The Commodity Futures Trading Commission (“CFTC”) has adopted regulations that subject registered investment companies and advisers to regulation by the CFTC if a fund invests more than a prescribed level of its assets in certain CFTC-regulated instruments (including futures, certain options and swap agreements) or markets itself as providing investment exposure to such instruments. The investment adviser has claimed an exclusion from the definition of “commodity pool operator” under the Commodity Exchange Act with respect to its management of the Fund. Accordingly, neither the Fund nor the adviser with respect to the operation of the Fund is subject to CFTC regulation. Because of its management of other strategies, the Fund’s adviser and Parametric Portfolio Associates LLC (Parametric), sub-adviser to the Fund, are registered with the CFTC as commodity pool operators. The adviser and Parametric are also registered as commodity trading advisors.
Managed Distribution Plan.
Pursuant to an exemptive order issued by the Securities and Exchange Commission (Order), the Fund is authorized to distribute long-term capital gains to shareholders more frequently than once per year. Pursuant to the Order, the Fund’s Board of Trustees approved a Managed Distribution Plan (MDP) pursuant to which the Fund makes monthly cash distributions to common shareholders, stated in terms of a fixed amount per common share.
The Fund currently distributes monthly cash distributions equal to $0.0993 per share in accordance with the MDP. You should not draw any conclusions about the Fund’s investment performance from the amount of these distributions or from the terms of the MDP. The MDP will be subject to regular periodic review by the Fund’s Board of Trustees and the Board may amend or terminate the MDP at any time without prior notice to Fund shareholders. However, at this time there are no reasonably foreseeable circumstances that might cause the termination of the MDP.
The Fund may distribute more than its net investment income and net realized capital gains and, therefore, a distribution may include a return of capital. A return of capital distribution does not necessarily reflect the Fund’s investment performance and should not be confused with “yield” or “income.” With each distribution, the Fund will issue a notice to shareholders and a press release containing information about the amount and sources of the distribution and other related information. The amounts and sources of distributions contained in the notice and press release are only estimates and are not provided for tax purposes. The amounts and sources of the Fund’s distributions for tax purposes will be reported to shareholders on Form 1099-DIV for each calendar year.
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.
Eaton Vance
Tax-Managed Buy-Write Opportunities Fund
June 30, 2024
Performance
Portfolio Manager(s)
Thomas C. Seto of Parametric Portfolio Associates LLC and Charles B. Gaffney and Douglas R. Rogers, CFA, CMT of Eaton Vance Management
% Average Annual Total Returns 1 |
Inception Date |
Six Months |
One Year |
Five Years |
Ten Years |
| Fund at NAV | 06/30/2005 | 12.85% | 18.04% | 9.84% | 9.05% |
| Fund at Market Price | — | 15.91 | 17.05 | 7.60 | 8.76 |
| S&P 500® Index | — | 15.29% | 24.56% | 15.03% | 12.85% |
| NASDAQ-100® Index | — | 17.47 | 30.77 | 21.74 | 18.90 |
| Cboe S&P 500 BuyWrite Index SM |
— | 7.59 | 8.91 | 5.55 | 5.76 |
| Cboe NASDAQ-100 BuyWrite Index SM |
— | 8.26 | 12.30 | 6.56 | 7.30 |
% Premium/Discount to NAV 2 |
|
| As of period end | (4.14)% |
Distributions 3 |
|
| Total Distributions per share for the period | $0.583 |
| Distribution Rate at NAV | 8.36% |
| Distribution Rate at Market Price | 8.72 |
See Endnotes and Additional Disclosures in this report.
Past performance is no guarantee of future results. Returns are historical and are calculated net of management fees and other expenses by determining the percentage change in net asset value (NAV) or market price (as applicable) with all distributions reinvested in accordance with the Fund’s Dividend Reinvestment Plan. Furthermore, returns do not reflect the deduction of taxes that shareholders may have to pay on Fund distributions or upon the sale of Fund shares. Performance at market price will differ from performance at NAV due to variations in the Fund’s market price versus NAV, which may reflect factors such as fluctuations in supply and demand for Fund shares, changes in Fund distributions, shifting market expectations for the Fund’s future returns and distribution rates, and other considerations affecting the trading prices of closed-end funds. Investment return and principal value will fluctuate so that shares, when sold, may be worth more or less than their original cost. Performance for periods less than or equal to one year is cumulative. Performance is for the stated time period only; due to market volatility, current Fund performance may be lower or higher than the quoted return. For performance as of the most recent month-end, please refer to eatonvance.com.
2
Eaton Vance
Tax-Managed Buy-Write Opportunities Fund
June 30, 2024
Fund Profile
Footnotes:
1 |
Depictions do not reflect the Fund’s option positions. Excludes cash and cash equivalents. |
3
Eaton Vance
Tax-Managed Buy-Write Opportunities Fund
June 30, 2024
Endnotes and Additional Disclosures
4
Eaton Vance
Tax-Managed Buy-Write Opportunities Fund
June 30, 2024
Portfolio of Investments (Unaudited) — continued
8
See Notes to Financial Statements.
Eaton Vance
Tax-Managed Buy-Write Opportunities Fund
June 30, 2024
Portfolio of Investments (Unaudited) — continued
Written Call Options (Exchange-Traded) — (1.1)% | |||||||
Description |
Number of Contracts |
Notional Amount |
Exercise Price |
Expiration Date |
Value | ||
| NASDAQ 100 Index | 28 | $ | 55,112,036 | $ | 19,000 | 7/1/24 | $ (1,976,660) |
| NASDAQ 100 Index | 28 | 55,112,036 | 19,200 | 7/2/24 | (1,435,000) | ||
| NASDAQ 100 Index | 27 | 53,143,749 | 19,300 | 7/3/24 | (1,151,550) | ||
| NASDAQ 100 Index | 28 | 55,112,036 | 19,300 | 7/8/24 | (1,286,880) | ||
| NASDAQ 100 Index | 27 | 53,143,749 | 19,800 | 7/10/24 | (391,905) | ||
| NASDAQ 100 Index | 27 | 53,143,749 | 19,900 | 7/12/24 | (382,455) | ||
| NASDAQ 100 Index | 27 | 53,143,749 | 20,000 | 7/15/24 | (315,495) | ||
| NASDAQ 100 Index | 27 | 53,143,749 | 20,200 | 7/17/24 | (209,250) | ||
| NASDAQ 100 Index | 26 | 51,175,462 | 20,000 | 7/19/24 | (400,790) | ||
| NASDAQ 100 Index | 27 | 53,143,749 | 20,000 | 7/22/24 | (465,615) | ||
| NASDAQ 100 Index | 27 | 53,143,749 | 20,100 | 7/24/24 | (422,820) | ||
| NASDAQ 100 Index | 27 | 53,143,749 | 20,200 | 7/26/24 | (645,023) | ||
| S&P 500 Index | 147 | 80,269,056 | 5,360 | 7/1/24 | (1,586,130) | ||
| S&P 500 Index | 146 | 79,723,008 | 5,380 | 7/2/24 | (1,298,670) | ||
| S&P 500 Index | 147 | 80,269,056 | 5,410 | 7/3/24 | (943,740) | ||
| S&P 500 Index | 147 | 80,269,056 | 5,410 | 7/8/24 | (1,078,980) | ||
| S&P 500 Index | 145 | 79,176,960 | 5,500 | 7/10/24 | (335,675) | ||
| S&P 500 Index | 146 | 79,723,008 | 5,490 | 7/12/24 | (534,360) | ||
| S&P 500 Index | 147 | 80,269,056 | 5,490 | 7/15/24 | (574,035) | ||
| S&P 500 Index | 146 | 79,723,008 | 5,550 | 7/17/24 | (275,940) | ||
| S&P 500 Index | 145 | 79,176,960 | 5,530 | 7/19/24 | (435,725) | ||
| S&P 500 Index | 145 | 79,176,960 | 5,540 | 7/22/24 | (412,525) | ||
| S&P 500 Index | 145 | 79,176,960 | 5,540 | 7/24/24 | (461,825) | ||
| S&P 500 Index | 146 | 79,723,008 | 5,570 | 7/26/24 | (557,943) | ||
Total |
$(17,578,991) | ||||||
Abbreviations: | |
| REITs | – Real Estate Investment Trusts |
9
See Notes to Financial Statements.
Eaton Vance
Tax-Managed Buy-Write Opportunities Fund
June 30, 2024
Statement of Assets and Liabilities (Unaudited)
June 30, 2024 | |
| Assets | |
| Unaffiliated investments, at value (identified cost $362,681,835) | $1,680,453,527 |
| Affiliated investments, at value (identified cost $2,341,442) | 2,341,442 |
| Dividends receivable | 755,422 |
| Dividends receivable from affiliated investments | 22,167 |
| Receivable for investments sold | 4,638,662 |
| Receivable for premiums on written options | 1,202,966 |
| Trustees' deferred compensation plan | 175,477 |
Total assets |
$1,689,589,663 |
| Liabilities | |
| Written options outstanding, at value (premiums received $13,723,574) | $17,578,991 |
| Payable for closed written options | 6,069,688 |
| Payable to affiliates: | |
| Investment adviser fee | 1,355,808 |
| Trustees' fees | 25,466 |
| Trustees' deferred compensation plan | 175,477 |
| Accrued expenses | 327,224 |
Total liabilities |
$25,532,654 |
Net Assets |
$1,664,057,009 |
| Sources of Net Assets | |
| Common shares, $0.01 par value, unlimited number of shares authorized | $1,167,546 |
| Additional paid-in capital | 425,852,684 |
| Distributable earnings | 1,237,036,779 |
Net Assets |
$1,664,057,009 |
| Net Asset Value Per Common Share | |
Net assets ÷ common shares issued and outstanding |
$14.25 |
10
See Notes to Financial Statements.
Eaton Vance
Tax-Managed Buy-Write Opportunities Fund
June 30, 2024
Statement of Operations (Unaudited)
Six Months Ended | |
June 30, 2024 | |
| Investment Income | |
| Dividend income (net of foreign taxes withheld of $8,814) | $10,278,566 |
| Dividend income from affiliated investments | 125,663 |
Total investment income |
$10,404,229 |
| Expenses | |
| Investment adviser fee | $7,993,812 |
| Trustees’ fees and expenses | 50,978 |
| Custodian fee | 210,044 |
| Transfer and dividend disbursing agent fees | 9,068 |
| Legal and accounting services | 78,072 |
| Printing and postage | 228,588 |
| Miscellaneous | 55,968 |
Total expenses |
$8,626,530 |
| Deduct: | |
| Waiver and/or reimbursement of expenses by affiliates | $3,625 |
Total expense reductions |
$3,625 |
Net expenses |
$8,622,905 |
Net investment income |
$1,781,324 |
| Realized and Unrealized Gain (Loss) | |
| Net realized gain (loss): | |
| Investment transactions | $123,594,647 |
| Written options | (72,035,874) |
Net realized gain |
$51,558,773 |
| Change in unrealized appreciation (depreciation): | |
| Investments | $129,949,854 |
| Written options | 6,697,577 |
Net change in unrealized appreciation (depreciation) |
$136,647,431 |
Net realized and unrealized gain |
$188,206,204 |
Net increase in net assets from operations |
$189,987,528 |
11
See Notes to Financial Statements.
Eaton Vance
Tax-Managed Buy-Write Opportunities Fund
June 30, 2024
Statements of Changes in Net Assets
Six Months Ended June 30, 2024 (Unaudited) |
Year Ended December 31, 2023 | |
| Increase (Decrease) in Net Assets | ||
| From operations: | ||
| Net investment income | $1,781,324 | $5,021,008 |
| Net realized gain | 51,558,773 | 44,734,638 |
| Net change in unrealized appreciation (depreciation) | 136,647,431 | 205,312,548 |
Net increase in net assets from operations |
$189,987,528 |
$255,068,194 |
Distributions to shareholders |
$ (68,021,211) * |
$(66,572,878) |
Tax return of capital to shareholders |
$— |
$(64,256,058) |
| Capital share transactions: | ||
| Reinvestment of distributions | $— | $2,879,543 |
| Issued in connection with tax-free reorganization (see Note 9) | — | 93,519,783 |
Net increase in net assets from capital share transactions |
$— |
$96,399,326 |
Net increase in net assets |
$121,966,317 |
$220,638,584 |
| Net Assets | ||
| At beginning of period | $1,542,090,692 | $1,321,452,108 |
At end of period |
$1,664,057,009 |
$1,542,090,692 |
| * | A portion of the distributions may be deemed a tax return of capital at year-end. See Note 2. |
12
See Notes to Financial Statements.
Eaton Vance
Tax-Managed Buy-Write Opportunities Fund
June 30, 2024
Financial Highlights
Six Months Ended June 30, 2024 (Unaudited) |
Year Ended December 31, | |||||
2023 |
2022 |
2021 |
2020 |
2019 | ||
| Net asset value — Beginning of period | $13.210 | $12.100 | $16.130 | $14.480 | $14.640 | $13.360 |
| Income (Loss) From Operations | ||||||
| Net investment income (1) |
$0.015 | $0.044 | $0.053 | $0.013 | $0.075 | $0.083 |
| Net realized and unrealized gain (loss) | 1.608 | 2.204 | (2.798) | 2.910 | 1.080 | 2.486 |
Total income (loss) from operations |
$1.623 |
$2.248 |
$(2.745) |
$2.923 |
$1.155 |
$2.569 |
| Less Distributions | ||||||
| From net investment income | $(0.583)* | $(0.043) | $(0.051) | $— | $(0.074) | $(0.082) |
| From net realized gain | — | (0.536) | (0.396) | — | — | — |
| Tax return of capital | — | (0.559) | (0.851) | (1.330) | (1.256) | (1.248) |
Total distributions |
$(0.583) |
$(1.138) |
$(1.298) |
$(1.330) |
$(1.330) |
$(1.330) |
Premium from common shares sold through shelf offering (see Note 5) (1) |
$— |
$— |
$0.013 |
$0.057 |
$0.015 |
$0.041 |
Net asset value — End of period |
$14.250 |
$13.210 |
$12.100 |
$16.130 |
$14.480 |
$14.640 |
Market value — End of period |
$13.670 |
$12.330 |
$12.280 |
$16.740 |
$15.350 |
$14.950 |
Total Investment Return on Net Asset Value (2) |
12.85% (3) |
19.58% |
(17.55)% |
21.39% |
9.14% |
20.23% |
Total Investment Return on Market Value (2) |
15.91% (3) |
9.98% |
(19.37)% |
18.84% |
13.30% |
21.68% |
| Ratios/Supplemental Data | ||||||
| Net assets, end of period (000’s omitted) | $1,664,057 | $1,542,091 | $1,321,452 | $1,694,817 | $1,327,348 | $1,268,146 |
| Ratios (as a percentage of average daily net assets): | ||||||
| Expenses | 1.08% (4)(5) |
1.09% (5) |
1.08% (5) |
1.08% | 1.09% | 1.08% |
| Net investment income | 0.22% (4) |
0.34% | 0.39% | 0.08% | 0.55% | 0.59% |
| Portfolio Turnover | 2% (3) |
8% | 19% | 9% | 9% | 6% |
(1) |
Computed using average shares outstanding. |
(2) |
Returns are historical and are calculated by determining the percentage change in net asset value or market value with all distributions reinvested. Distributions are assumed to be reinvested at prices obtained under the Fund's dividend reinvestment plan. |
(3) |
Not annualized. |
(4) |
Annualized. |
(5) |
Includes a reduction by the investment adviser of a portion of its adviser fee due to the Fund's investment in the Liquidity Fund (equal to less than 0.005% of average daily net assets for the six months ended June 30, 2024 and the years ended December 31, 2023 and 2022). |
| * | A portion of the distributions may be deemed from net realized gain or a tax return of capital at year-end. See Note 2. |
13
See Notes to Financial Statements.
Eaton Vance
Tax-Managed Buy-Write Opportunities Fund
June 30, 2024
Notes to Financial Statements (Unaudited)
1 Significant Accounting Policies
Eaton Vance Tax-Managed Buy-Write Opportunities Fund (the Fund) is a Massachusetts business trust registered under the Investment Company Act of 1940, as amended (the 1940 Act), as a diversified, closed-end management investment company. The Fund’s primary investment objective is to provide current income and gains, with a secondary objective of capital appreciation.
The following is a summary of significant accounting policies of the Fund. The policies are in conformity with accounting principles generally accepted in the United States of America (U.S. GAAP). The Fund is an investment company and follows accounting and reporting guidance in the Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 946.
A Investment Valuation
—
The following methodologies are used to determine the market value or fair value of investments.
Equity Securities.
Equity securities listed on a U.S. securities exchange generally are valued at the last sale or closing price on the day of valuation or, if no sales took place on such date, at the mean between the closing bid and ask prices on the exchange where such securities are principally traded. Equity securities listed on the NASDAQ National Market System are valued at the NASDAQ official closing price. Unlisted or listed securities for which closing sales prices or closing quotations are not available are valued at the mean between the latest available bid and ask prices.
Derivatives.
U.S. exchange-traded options are valued at the mean between the bid and ask prices at valuation time as reported by the Options Price Reporting Authority. Non-U.S. exchange-traded options and over-the-counter options are valued by a third party pricing service using techniques that consider factors including the value of the underlying instrument, the volatility of the underlying instrument and the period of time until option expiration.
Other.
Investments in management investment companies (including money market funds) that do not trade on an exchange are valued at the net asset value as of the close of each business day.
Fair Valuation.
In connection with Rule 2a-5 of the 1940 Act, the Trustees have designated the Fund’s investment adviser as its valuation designee. Investments for which valuations or market quotations are not readily available or are deemed unreliable are valued by the investment adviser, as valuation designee, at fair value using methods that most fairly reflect the security’s “fair value”, which is the amount that the Fund might reasonably expect to receive for the security upon its current sale in the ordinary course. Each such determination is based on a consideration of relevant factors, which are likely to vary from one pricing context to another. These factors may include, but are not limited to, the type of security, the existence of any contractual restrictions on the security’s disposition, the price and extent of public trading in similar securities of the issuer or of comparable companies or entities, quotations or relevant information obtained from broker/dealers or other market participants, information obtained from the issuer, analysts, and/or the appropriate stock exchange (for exchange-traded securities), an analysis of the company’s or entity’s financial statements, and an evaluation of the forces that influence the issuer and the market(s) in which the security is purchased and sold.
B Investment Transactions
—
Investment transactions for financial statement purposes are accounted for on a trade date basis. Realized gains and losses on investments sold are determined on the basis of identified cost.
C Income
—
Dividend income is recorded on the ex-dividend date for dividends received in cash and/or securities. 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.
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 June 30, 2024, 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 Use of Estimates
—
The preparation of the financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of income and expense during the reporting period. Actual results could differ from those estimates.
F Indemnifications
—
Under the Fund’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 Fund) could be deemed to have personal liability for the obligations of the Fund. However, the Fund’s Declaration of Trust contains an express disclaimer of liability on the part of Fund shareholders and the By-laws provide that the Fund shall assume, upon request by the shareholder, the defense on behalf of any Fund shareholders. Moreover, the By-laws also provide for indemnification out of Fund property of any shareholder held personally liable solely by reason of being or having been a shareholder for all loss or expense arising from such liability. Additionally, in the normal course of business, 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.
14
Eaton Vance
Tax-Managed Buy-Write Opportunities Fund
June 30, 2024
Notes to Financial Statements (Unaudited) — continued
G Written Options
—
Upon the writing of a call or a put option, the premium received by the Fund is included in the Statement of Assets and Liabilities as a liability. The amount of the liability is subsequently marked-to-market to reflect the current market value of the option written, in accordance with the Fund’s policies on investment valuations discussed above. Premiums received from writing options which expire are treated as realized gains. Premiums received from writing options which are exercised or are closed are added to or offset against the proceeds or amount paid on the transaction to determine the realized gain or loss. When an index option is exercised, the Fund is required to deliver an amount of cash determined by the excess of the exercise price of the option over the value of the index (in the case of a put) or the excess of the value of the index over the exercise price of the option (in the case of a call) at contract termination. If a put option on a security is exercised, the premium reduces the cost basis of the securities purchased by the Fund. The Fund, as a writer of an option, may have no control over whether the underlying securities or other assets may be sold (call) or purchased (put) and, as a result, bears the market risk of an unfavorable change in the price of the securities or other assets underlying the written option. The Fund may also bear the risk of not being able to enter into a closing transaction if a liquid secondary market does not exist.
H Interim Financial Statements
—
The interim financial statements relating to June 30, 2024 and for the six months then ended have not been audited by an independent registered public accounting firm, but in the opinion of the Fund’s management, reflect all adjustments, consisting only of normal recurring adjustments, necessary for the fair presentation of the financial statements.
2 Distributions to Shareholders and Income Tax Information
Subject to its Managed Distribution Plan, the Fund makes monthly distributions from its cash available for distribution, which consists of the Fund’s dividends and interest income after payment of Fund expenses, net option premiums and net realized and unrealized gains on stock investments. The Fund intends to distribute all or substantially all of its net realized capital gains. Distributions are recorded on the ex-dividend date. Distributions to shareholders are determined in accordance with income tax regulations, which may differ from U.S. GAAP. As required by U.S. GAAP, only distributions in excess of tax basis earnings and profits are reported in the financial statements as a return of capital. Permanent differences between book and tax accounting relating to distributions are reclassified to paid-in capital. For tax purposes, distributions from short-term capital gains are considered to be from ordinary income. Distributions in any year may include a substantial return of capital component. For the six months ended June 30, 2024, the amount of distributions estimated to be a tax return of capital was approximately $66,616,000. The final determination of tax characteristics of the Fund’s distributions will occur at the end of the year, at which time it will be reported to the shareholders.
At December 31, 2023, the Fund had a net capital loss of $56,932,941 attributable to security transactions incurred after October 31, 2023 that it has elected to defer. This net capital loss is treated as arising on the first day of the Fund’s taxable year ending December 31, 2024.
The cost and unrealized appreciation (depreciation) of investments, including open derivative contracts, of the Fund at June 30, 2024, as determined on a federal income tax basis, were as follows:
Aggregate cost |
$367,118,139 |
| Gross unrealized appreciation | $1,299,099,817 |
| Gross unrealized depreciation | (1,001,978) |
Net unrealized appreciation |
$1,298,097,839 |
3 Investment Adviser Fee and Other Transactions with Affiliates
The investment adviser fee is earned by Eaton Vance Management (EVM), an indirect, wholly-owned subsidiary of Morgan Stanley, as compensation for investment advisory services rendered to the Fund. The fee is computed at an annual rate as a percentage of average daily gross assets, as defined in the investment advisory agreement, as follows and is payable monthly:
Average Daily Gross Assets |
Annual Fee Rate |
| Up to and including $1.5 billion | 1.000% |
| Over $1.5 billion up to and including $3 billion | 0.980% |
| Over $3 billion up to and including $5 billion | 0.960% |
| Over $5 billion | 0.940% |
For purposes of this calculation, gross assets represent net assets plus obligations attributable to investment leverage. During the six months ended June 30, 2024, the Fund had no obligations attributable to investment leverage. For the six months ended June 30, 2024, the investment adviser fee amounted to $7,993,812 or 1.00% (annualized) of the Fund's average daily gross assets.
15
Eaton Vance
Tax-Managed Buy-Write Opportunities Fund
June 30, 2024
Notes to Financial Statements (Unaudited) — continued
Pursuant to an investment sub-advisory agreement, EVM has delegated a portion of the investment management to Parametric Portfolio Associates LLC (Parametric), an affiliate of EVM and an indirect, wholly-owned subsidiary of Morgan Stanley. EVM pays Parametric a portion of its investment adviser fee for sub-advisory services provided to the Fund. The Fund may invest in a money market fund, the Institutional Class of the Morgan Stanley Institutional Liquidity Funds - Government Portfolio (the “Liquidity Fund”), an open-end management investment company managed by Morgan Stanley Investment Management Inc., a wholly-owned subsidiary of Morgan Stanley. The investment adviser fee paid by the Fund is reduced by an amount equal to its pro rata share of the advisory and administration fees paid by the Fund due to its investment in the Liquidity Fund. For the six months ended June 30, 2024, the investment adviser fee paid was reduced by $3,625 relating to the Fund’s investment in the Liquidity Fund. EVM also serves as administrator of the Fund, but receives no compensation.
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 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. Certain officers and Trustees of the Fund are officers of EVM.
4 Purchases and Sales of Investments
Purchases and sales of investments, other than short-term obligations, aggregated $25,635,071 and $163,546,670, respectively, for the six months ended June 30, 2024.
5 Common Shares of Beneficial Interest and Shelf Offering
The Fund may issue common shares pursuant to its dividend reinvestment plan. There were no common shares issued by the Fund for the six months ended June 30, 2024. Common shares issued by the Fund pursuant to its dividend reinvestment plan for the year ended December 31, 2023 were 230,558.
In August 2012, the Board of Trustees initially approved a share repurchase program for the Fund. Pursuant to the reauthorization of the share repurchase program by the Board of Trustees in March 2019, the Fund is authorized to repurchase up to 10% of its common shares outstanding as of the last day of the prior calendar year at market prices when shares are trading at a discount to net asset value. The share repurchase program does not obligate the Fund to purchase a specific amount of shares. There were no repurchases of common shares by the Fund for the six months ended June 30, 2024 and the year ended December 31, 2023.
Pursuant to its most recent registration statement filed with the SEC, the Fund is authorized to issue up to an additional 19,503,313 common shares through an equity shelf offering program (the “shelf offering”). Under the shelf offering, the Fund, subject to market conditions, may raise additional capital from time to time and in varying amounts and offering methods at a net price at or above the Fund's net asset value per common share. During the six months ended June 30, 2024 and the year ended December 31, 2023, there were no shares sold by the Fund pursuant to its shelf offering.
6 Financial Instruments
The Fund may trade in financial instruments with off-balance sheet risk in the normal course of its investing activities. These financial instruments may include written options and may involve, to a varying degree, elements of risk in excess of the amounts recognized for financial statement purposes. The notional or contractual amounts of these instruments represent the investment the Fund has in particular classes of financial instruments and do not necessarily represent the amounts potentially subject to risk. The measurement of the risks associated with these instruments is meaningful only when all related and offsetting transactions are considered. A summary of obligations under these financial instruments at June 30, 2024 is included in the Portfolio of Investments. At June 30, 2024, the Fund had sufficient cash and/or securities to cover commitments under these contracts.
The Fund is subject to equity price risk in the normal course of pursuing its investment objectives. The Fund writes index call options above the current value of the index to generate premium income. In writing index call options, the Fund in effect, sells potential appreciation in the value of the applicable index above the exercise price in exchange for the option premium received. The Fund retains the risk of loss, minus the premium received, should the value of the underlying index decline.
The fair value of open derivative instruments (not considered to be hedging instruments for accounting disclosure purposes) and whose primary underlying risk exposure is equity price risk at June 30, 2024 was as follows:
Fair Value | ||
Derivative |
Asset Derivative |
Liability Derivative (1) |
| Written options | $ — | $(17,578,991) |
(1) |
Statement of Assets and Liabilities location: Written options outstanding, at value. |
16
Eaton Vance
Tax-Managed Buy-Write Opportunities Fund
June 30, 2024
Notes to Financial Statements (Unaudited) — continued
The effect of derivative instruments (not considered to be hedging instruments for accounting disclosure purposes) on the Statement of Operations and whose primary underlying risk exposure is equity price risk for the six months ended June 30, 2024 was as follows:
Derivative |
Realized Gain (Loss) on Derivatives Recognized in Income (1) |
Change in Unrealized Appreciation (Depreciation) on Derivatives Recognized in Income (2) |
| Written options | $(72,035,874) | $6,697,577 |
(1) |
Statement of Operations location: Net realized gain (loss): Written options. |
(2) |
Statement of Operations location: Change in unrealized appreciation (depreciation): Written options. |
The average number of written options contracts outstanding during the six months ended June 30, 2024, which is indicative of the volume of this derivative type, was 2,150 contracts.
7 Affiliated Investments
At June 30, 2024, the value of the Fund's investment in funds that may be deemed to be affiliated was $2,341,442, which represents 0.1% of the Fund's net assets. Transactions in such investments by the Fund for the six months ended June 30, 2024 were as follows:
Name |
Value, beginning of period |
Purchases |
Sales proceeds |
Net realized gain (loss) |
Change in unrealized appreciation (depreciation) |
Value, end of period |
Dividend income |
Shares, end of period |
Short-Term Investments | ||||||||
| Liquidity Fund | $5,160,748 | $129,518,532 | $(132,337,838) | $ — | $ — | $2,341,442 | $125,663 | 2,341,442 |
8 Fair Value Measurements
Under generally accepted accounting principles for fair value measurements, a three-tier hierarchy to prioritize the assumptions, referred to as inputs, is used in valuation techniques to measure fair value. The three-tier hierarchy of inputs is summarized in the three broad levels listed below.
| • | Level 1 – quoted prices in active markets for identical investments |
| • | Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.) |
| • | Level 3 – significant unobservable inputs (including a fund's own assumptions in determining the fair value of investments) |
In cases where the inputs used to measure fair value fall in different levels of the fair value hierarchy, the level disclosed is determined based on the lowest level input that is significant to the fair value measurement in its entirety. The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
17
Eaton Vance
Tax-Managed Buy-Write Opportunities Fund
June 30, 2024
Notes to Financial Statements (Unaudited) — continued
At June 30, 2024, the hierarchy of inputs used in valuing the Fund's investments and open derivative instruments, which are carried at fair value, were as follows:
Asset Description |
Level 1 |
Level 2 |
Level 3 |
Total |
| Common Stocks | $1,680,453,527* | $ — | $ — | $1,680,453,527 |
| Short-Term Investments | 2,341,442 | — | — | 2,341,442 |
Total Investments |
$ 1,682,794,969 |
$ — |
$ — |
$1,682,794,969 |
Liability Description |
||||
| Written Call Options | $ (17,578,991) | $ — | $ — | $ (17,578,991) |
Total |
$ (17,578,991) |
$ — |
$ — |
$ (17,578,991) |
| * | The level classification by major category of investments is the same as the category presentation in the Portfolio of Investments. |
9 Reorganization
At the close of business on April 14, 2023, the Fund acquired the net assets of Eaton Vance Tax-Managed Buy-Write Strategy Fund (Buy-Write Strategy Fund) pursuant to an Agreement and Plan of Reorganization approved by shareholders of Buy-Write Strategy Fund. The purpose of the transaction was to combine two funds managed by EVM with substantially similar investment objectives and policies. The reorganization was accomplished by a tax-free exchange of 7,331,770 shares of the Fund (valued at $93,519,783) for the 9,769,874 shares of Buy-Write Strategy Fund outstanding on April 14, 2023.
The investment portfolio of Buy-Write Strategy Fund, with a fair value of $82,082,623 and identified cost of $46,010,081 and cash were the principal assets acquired by the Fund. For financial reporting purposes, assets received and shares issued by the Fund were recorded at fair value; however, the identified cost of the investments received from Buy-Write Strategy Fund was carried forward to align ongoing reporting of the Fund’s realized and unrealized gains and losses with amounts distributable to shareholders for tax purposes. The aggregate net assets of the Fund immediately before the acquisition were $1,395,732,729. The net assets of Buy-Write Strategy Fund at that date of $93,519,783, including $18,870,129 of accumulated net realized losses and $36,072,542 of unrealized appreciation, were combined with those of the Fund, resulting in combined net assets of $1,489,252,512.
Assuming the acquisition had been completed on January 1, 2023, the beginning of the Fund’s annual reporting period, the Fund’s pro forma results of operations for the year ended December 31, 2023 are as follows:
| Net investment income | $5,064,126 |
| Net realized and unrealized gain | $257,051,148 |
| Net increase in net assets from operations | $262,115,274 |
Because the combined investment portfolios have been managed as a single integrated portfolio since the reorganization was completed, it was not practicable to separate the amounts of revenue and earnings of Buy-Write Strategy Fund since April 14, 2023 through December 31, 2023.
18
Eaton Vance
Tax-Managed Buy-Write Opportunities Fund
June 30, 2024
Annual Meeting of Shareholders (Unaudited)
The Fund held its Annual Meeting of Shareholders on April 10, 2024. The following action was taken by the shareholders:
Proposal 1(b):
The election of Cynthia E. Frost, Scott E. Wennerholm and Nancy A. Wiser as Class I Trustees of the Fund for a three-year term expiring in 2027.
Number of Shares | ||||
Nominees for Trustee |
For |
Withheld | ||
| Cynthia E. Frost | 82,236,298 | 2,347,725 | ||
| Scott E. Wennerholm | 82,430,668 | 2,153,355 | ||
| Nancy A. Wiser | 82,196,548 | 2,387,475 | ||
19
Eaton Vance
Tax-Managed Buy-Write Opportunities Fund
June 30, 2024
Board of Trustees’ Contract Approval
Overview of the Contract Review Process
The Investment Company Act of 1940, as amended (the “1940 Act”), provides, in substance, that the investment advisory agreement between a fund and its investment adviser will continue in effect from year-to-year only if its continuation is approved on an annual basis by a vote of the fund’s board of trustees, including a majority of the trustees who are not “interested persons” of the fund (“independent trustees”), cast in person at a meeting called for the purpose of considering such approval.
At a meeting held on June 6, 2024, the Boards of Trustees/Directors (collectively, the “Board”) that oversee the registered investment companies advised by Eaton Vance Management or its affiliate, Boston Management and Research (the “Eaton Vance Funds”), including a majority of the independent trustees (the “Independent Trustees”), voted to approve the continuation of existing investment advisory agreements and sub-advisory agreements
1
for each of the Eaton Vance Funds for an additional one-year period. The Board relied upon the affirmative recommendation of its Contract Review Committee, which is a committee comprised of all of the Independent Trustees. Prior to making its recommendation, the Contract Review Committee reviewed information furnished by the adviser and sub-adviser to each of the Eaton Vance Funds (including information specifically requested by the Board) for a series of meetings held between April and June 2024, as well as certain additional information provided in response to specific requests from the Independent Trustees as members of the Contract Review Committee. Members of the Contract Review Committee also considered information received at prior meetings of the Board and its committees, to the extent such information was relevant to the Contract Review Committee’s annual evaluation of the investment advisory agreements and sub-advisory agreements.In connection with its evaluation of the investment advisory agreements and sub-advisory agreements, the Board considered various information relating to the Eaton Vance Funds. This included information applicable to all or groups of Eaton Vance Funds, which is referenced immediately below, and information applicable to the particular Eaton Vance Fund covered by this report (each “Eaton Vance Fund” is referred to below as a “fund”). (For funds that invest through one or more underlying portfolios, references to “each fund” in this section may include information that was considered at the portfolio-level.)
Information about Fees, Performance and Expenses
• A report from an independent data provider comparing advisory and other fees paid by each fund to such fees paid by comparable funds, as identified by the independent data provider (“comparable funds”);
• A report from an independent data provider comparing each fund’s total expense ratio (and its components) to those of comparable funds;
• A report from an independent data provider comparing the investment performance of each fund (including, as relevant, total return data, income data, Sharpe ratios, and information ratios) to the investment performance of comparable funds and, as applicable, benchmark indices, over various time periods;
• In certain instances, data regarding investment performance relative to customized groups of peer funds and blended indices identified by the adviser in consultation with the Portfolio Management Committee of the Board (a committee exclusively comprised of Independent Trustees);
• Comparative information concerning the fees charged and services provided by the adviser and sub-adviser to each fund in managing other accounts (which may include other funds, collective investment trusts and institutional accounts) with the same or substantially similar investment objective as the fund and with a significant overlap in holdings based on criteria set by the Board, if any;
• Profitability analyses with respect to the adviser and sub-adviser to each of the funds;
Information about Portfolio Management and Trading
•
Descriptions of the investment management services provided to each fund, as well as each of the funds’ investment strategies and policies;
• The procedures and processes used by the adviser to determine the value of fund assets, including, when necessary, the determination of “fair value” by the adviser in its role as each funds’ valuation designee and actions taken to monitor and test the effectiveness of such procedures and processes;
• Information about the policies and practices of each fund’s adviser and sub-adviser with respect to trading, including their processes for seeking best execution of portfolio transactions;
• Information about the allocation of brokerage transactions and the benefits, if any, received by the adviser and sub-adviser to each fund as a result of brokerage allocation, including, as applicable, information concerning the acquisition of research through client commission arrangements and policies with respect to “soft dollars”;
• Data relating to the portfolio turnover rate of each fund and related information regarding active management in the context of particular strategies;
Information about each Adviser and Sub-adviser
• Reports detailing the financial results and condition of the adviser and sub-adviser to each fund;
• Information regarding the individual investment professionals whose responsibilities include portfolio management and investment research for the funds, and, for portfolio managers and certain other investment professionals, information relating to their responsibilities with respect to managing other funds and investment accounts, as applicable;
1
Not all Eaton Vance Funds have entered into a sub-advisory agreement with a sub-adviser. Accordingly, references to “sub-adviser” or “sub-advisory agreement” in this “Overview” section may not be applicable to the particular Eaton Vance Fund covered by this report. Eaton Vance Management and Boston Management and Research are referred to collectively as the “adviser.”
20
Eaton Vance
Tax-Managed Buy-Write Opportunities Fund
June 30, 2024
Board of Trustees’ Contract Approval — continued
• Information regarding the adviser’s and its parent company’s (Morgan Stanley’s) efforts to retain and attract talented investment professionals, including in the context of a competitive marketplace for talent;
• Information regarding the adviser’s compensation methodology for its investment professionals and the incentives and accountability it creates, along with investment professionals’ investments in the fund(s) they manage;
• The personal trading codes of ethics of the adviser and its affiliates and the sub-adviser of each fund, together with information relating to compliance with, and the administration of, such codes;
• Policies and procedures relating to proxy voting, including regular reporting with respect to fund proxy voting activities;
• Information regarding the handling of corporate actions and class actions, as well as information regarding litigation and other regulatory matters;
• Information concerning the resources devoted to compliance efforts undertaken by the adviser and its affiliates and the sub-adviser of each fund, including descriptions of their various compliance programs and their record of compliance and remediation;
• Information concerning the business continuity and disaster recovery plans of the adviser and its affiliates and the sub-adviser of each fund;
• A description of the adviser’s oversight of sub-advisers, including with respect to regulatory and compliance issues, investment management and other matters;
Other Relevant Information
• Information regarding ongoing initiatives to further integrate and harmonize, where applicable, the investment management and other departments of the adviser and its affiliates with the overall investment management infrastructure of Morgan Stanley, in light of Morgan Stanley’s acquisition of Eaton Vance Corp. on March 1, 2021;
• Information concerning the nature, cost, and character of the administrative and other non-investment advisory services provided by the adviser and its affiliates;
• Information concerning oversight of the relationship with the custodian, subcustodians, fund accountants, and other third-party service providers by the adviser and/or administrator to each of the funds;
• Information concerning efforts to implement policies and procedures with respect to various regulations applicable to the funds, including Rule 12d1-4 (the Fund-of-Funds Rule), Rule 18f-4 (the Derivatives Rule), and Rule 2a-5 (the Fair Valuation Rule);
• For an Eaton Vance Fund structured as an exchange-listed closed-end fund, information concerning the benefits of the closed-end fund structure, as well as, where relevant, the closed-end fund’s market prices (including as compared to the closed-end fund’s net asset value (NAV)), trading volume data, continued use of auction preferred shares (where applicable), distribution rates, and other relevant matters;
• The risks that the adviser and/or its affiliates incur in connection with the management and operation of the funds, including, among others, litigation, regulatory, entrepreneurial, and other business risks (and the associated costs of such risks); and
• The terms of each investment advisory agreement and sub-advisory agreement.
During the various meetings of the Board and its committees over the course of the year leading up to the June 6, 2024 meeting, the Board and its committees received information from portfolio managers and other investment professionals of the adviser and sub-advisers of the funds regarding investment and performance matters, and considered various investment and trading strategies used in pursuing the funds’ investment objectives. The Board and its committees also received information regarding risk management techniques employed in connection with the management of the funds. The Board and its committees evaluated issues pertaining to industry and regulatory developments, compliance procedures, fund governance, and other issues with respect to the funds, and received and participated in reports and presentations provided by the adviser and sub-advisers, with respect to such matters. In addition to the formal meetings of the Board and its committees, the Independent Trustees held regular video or telephone conferences to discuss, among other topics, matters relating to the continuation of investment advisory agreements and sub-advisory agreements.
The Contract Review Committee was advised throughout the contract review process by Kirkland & Ellis LLP, independent legal counsel for the Independent Trustees. The members of the Contract Review Committee, with the advice of such counsel, exercised their own business judgment in determining the material factors to be considered in evaluating each investment advisory agreement and sub-advisory agreement and the weight to be given to each such factor. The conclusions reached with respect to each investment advisory agreement and sub-advisory agreement were based on a comprehensive evaluation of all the information provided and not any single factor. Moreover, each member of the Contract Review Committee may have placed varying emphasis on particular factors in reaching conclusions with respect to each investment advisory agreement and sub-advisory agreement. In evaluating each investment advisory agreement and sub-advisory agreement, including the fee structures and other terms contained in such agreements, the members of the Contract Review Committee were also informed by multiple years of analysis and discussion with the adviser and sub-adviser to each of the Eaton Vance Funds.
Results of the Contract Review Process
Based on its consideration of the foregoing, and such other information it deemed relevant, including the factors and conclusions described below, the Contract Review Committee concluded that the continuation of the investment advisory agreement between Eaton Vance Tax-Managed Buy-Write Opportunities Fund (the “Fund”) and Eaton Vance Management (the “Adviser”) and the sub-advisory agreement between the Adviser and Parametric
21
Eaton Vance
Tax-Managed Buy-Write Opportunities Fund
June 30, 2024
Board of Trustees’ Contract Approval — continued
Portfolio Associates LLC (the “Sub-adviser”), an affiliate of the Adviser, with respect to the Fund, including their respective fee structures, are in the interests of shareholders and, therefore, recommended to the Board approval of each agreement. Based on the recommendation of the Contract Review Committee, the Board, including a majority of the Independent Trustees, voted to approve continuation of the investment advisory 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 for the Fund, the Board evaluated the nature, extent and quality of services provided to the Fund by the Adviser and the Sub-adviser.
The Board considered the Adviser’s and the Sub-adviser’s management capabilities and investment processes in light of the types of investments held by the Fund, including the education and experience of the investment professionals who provide services to the Fund. Regarding the Adviser, the Board considered the Adviser’s responsibilities with respect to oversight of the Sub-adviser and coordinating its activities in implementing the Fund’s investment strategies. In particular, the Board considered the abilities and experience of the Adviser’s investment professionals in analyzing factors such as tax efficiency and special considerations relevant to investing in stocks and selling call options on one or more U.S. indices. The Board considered that the Adviser has devoted extensive resources to in-house equity research and also draws upon independent research available from third-party sources. With respect to the Sub-adviser, the Board considered the experience of the Sub-adviser’s investment professionals in deploying quantitative-based investment strategies. The Board also took into account the resources dedicated to portfolio management and other services, the compensation methods of the Adviser and other factors, including the reputation and resources of the Adviser to recruit and retain highly qualified research, advisory and supervisory investment professionals. In addition, the Board considered the time and attention devoted to the Eaton Vance Funds, including the Fund, by senior management, as well as the infrastructure, operational capabilities and support staff in place to assist in the portfolio management and operations of the Fund, including the provision of administrative services. The Board also considered the business-related and other risks to which the Adviser or its affiliates may be subject in managing the Fund. The Board considered the deep experience of the Adviser and its affiliates with managing and operating funds organized as exchange-listed closed-end funds, such as the Fund. In this regard, the Board considered, among other things, the Adviser’s and its affiliates’ experience monitoring and assessing trading price discounts and premiums and adhering to the requirements of securities exchanges.
The Board considered the compliance programs of the Adviser and relevant affiliates thereof, including the Sub-adviser. The Board considered compliance and reporting matters regarding, among other things, personal trading by investment professionals, disclosure of portfolio holdings, compliance with policies and procedures, portfolio valuation, business continuity and the allocation of investment opportunities. The Board also considered relevant examinations of the Adviser and its affiliates by regulatory authorities, such as the Securities and Exchange Commission and the Financial Industry Regulatory Authority.
The Board considered other administrative services provided or overseen by Eaton Vance Management and its affiliates, including transfer agency and accounting services. The Board evaluated the benefits to shareholders of investing in a fund that is a part of a large fund complex offering exposure to a variety of asset classes and investment disciplines.
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 that of comparable funds identified by an independent data provider (the peer group), as well as appropriate benchmark indices. The Board’s review included comparative performance data with respect to the Fund for the one-, three-, five- and ten-year periods ended December 31, 2023. In this regard, the Board noted that the performance of the Fund was consistent with the median performance of the Fund’s peer group for the three-year period. The Board also noted that the performance of the Fund was higher than its blended and one of its secondary benchmark indexes and lower than its primary and other secondary benchmark indexes for the three-year period. The Board concluded that the performance of the Fund was satisfactory.
Management Fees and Expenses
The Board considered contractual fee rates payable by the Fund for advisory and administrative services (referred to collectively as “management fees”). As part of its review, the Board considered the Fund’s management fees and total expense ratio for the one-year period ended December 31, 2023, as compared to those of comparable funds, before and after giving effect to any undertaking to waive fees or reimburse expenses. The Board also considered certain Fund specific factors that had an impact on the Fund’s total expense ratio relative to comparable funds, as identified by management in response to requests from the Contract Review Committee.
After considering the foregoing information, and in light of the nature, extent and quality of the services provided by the Adviser and the Sub-adviser, the Board concluded that the management fees charged for advisory and related services are reasonable.
22
Eaton Vance
Tax-Managed Buy-Write Opportunities Fund
June 30, 2024
Board of Trustees’ Contract Approval — continued
Profitability and “Fall-Out” Benefits
The Board considered the level of profits realized by the Adviser and relevant affiliates thereof, including the Sub-adviser, in providing investment advisory and administrative services to the Fund and to all Eaton Vance Funds as a group. The Board considered the level of profits realized without regard to marketing support or other payments by the Adviser and its affiliates to third parties in respect of distribution or other services.
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 not excessive.
The Board also considered direct or indirect fall-out benefits received by the Adviser and its affiliates, including the Sub-adviser, in connection with their respective relationships with the Fund, including the benefits of research services that may be available to the Adviser or the Sub-adviser as a result of securities transactions effected for the Fund and other investment advisory clients.
Economies of Scale
In reviewing management fees and profitability, the Board also considered the extent to which the Adviser and its affiliates, on the one hand, and the Fund, on the other hand, can expect to realize benefits from economies of scale as the assets of the Fund increase. The Board acknowledged the difficulty in accurately measuring the benefits resulting from economies of scale, if any, with respect to the management of any specific fund or group of funds. To assist in the evaluation of the sharing of any economies of scale, the Board received data showing for recent years, asset levels, Adviser profitability and total expense ratios. Based upon the foregoing, the Board concluded that the Fund currently shares in the benefits from economies of scale, if any, when they are realized by the Adviser. The Board also considered the fact that the Fund is not continuously offered in the same manner as an open-end fund and that the Fund is authorized to issue additional common shares through a shelf offering. The Board did not find that the implementation of breakpoints in the advisory fee schedule is warranted at this time.
23
Eaton Vance
Tax-Managed Buy-Write Opportunities Fund
June 30, 2024
Officers and Trustees
| Officers | |
| R. Kelly Williams, Jr. President |
Nicholas S. Di Lorenzo Secretary |
| Deidre E. Walsh Vice President and Chief Legal Officer |
Laura T. Donovan Chief Compliance Officer |
| James F. Kirchner Treasurer |
|
| Trustees |
24
Eaton Vance Funds
| U.S. Customer Privacy Notice | March 2024 |
FACTS |
WHAT DOES EATON VANCE DO WITH YOUR PERSONAL INFORMATION? |
Why? |
Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do. |
What? |
The types of personal information we collect and share depend on the product or service you have with us. This information can include:■ Social Security number and income ■ investment experience and risk tolerance ■ checking account information and wire transfer instructions |
How? |
All financial companies need to share customers’ personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers’ personal information; the reasons Eaton Vance chooses to share; and whether you can limit this sharing. |
Reasons we can share your personal information |
Does Eaton Vance share? |
Can you limit this sharing? |
For our everyday business purposes — such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus |
Yes | No |
For our marketing purposes — to offer our products and services to you |
Yes | No |
For joint marketing with other financial companies |
No | We don’t share |
For our affiliates’ everyday business purposes — information about your transactions and experiences |
Yes | No* |
For our affiliates’ everyday business purposes — information about your creditworthiness |
Yes | Yes* |
For our affiliates to market to you |
Yes | Yes* |
For nonaffiliates to market to you |
No | We don’t share |
To limit our sharing |
Call toll-free 1-800-262-1122 or email: Please note: new no longer |
Questions? |
Call toll-free 1-800-262-1122 or email: |
25
Eaton Vance Funds
| U.S. Customer Privacy Notice — continued | March 2024 |
Page 2
Who we are | |
Who is providing this notice? |
Eaton Vance Management and our investment management affiliates (“Eaton Vance”) (see Affiliates definition below.) |
What we do | |
How does Eaton Vance protect my personal information? |
To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings. We have policies governing the proper handling of customer information by personnel and requiring third parties that provide support to adhere to appropriate security standards with respect to such information. |
How does Eaton Vance collect my personal information? |
We collect your personal information, for example, when you■ open an account or make deposits or withdrawals from your account ■ buy securities from us or make a wire transfer ■ give us your contact informationWe also collect your personal information from others, such as credit bureaus, affiliates, or other companies. |
Why can’t I limit all sharing? |
Federal law gives you the right to limit only■ sharing for affiliates’ everyday business purposes — information about your creditworthiness ■ affiliates from using your information to market to you ■ sharing for nonaffiliates to market to youState laws and individual companies may give you additional rights to limit sharing. (See below for more on your rights under state law.) |
What happens when I limit sharing for an account I hold jointly with someone else? |
Your choices will apply to everyone on your account. |
Definitions | |
Affiliates |
Companies related by common ownership or control. They can be financial and nonfinancial companies.■ Our affiliates include registered investment advisers such as Eaton Vance Management, Eaton Vance Advisers International Ltd., Boston Management and Research, Calvert Research and Management, Parametric Portfolio Associates LLC, Atlanta Capital Management Company LLC, Morgan Stanley Investment Management Inc., Morgan Stanley Investment Management Co.; registered broker-dealers such as Morgan Stanley Distributors Inc. and Eaton Vance Distributors, Inc. (together, the “Investment Management Affiliates”); and companies with a Morgan Stanley name and financial companies such as Morgan Stanley Smith Barney LLC and Morgan Stanley & Co. (the “Morgan Stanley Affiliates”). |
Nonaffiliates |
Companies not related by common ownership or control. They can be financial and nonfinancial companies.■ Eaton Vance does not share with nonaffiliates so they can market to you. |
Joint marketing |
A formal agreement between nonaffiliated financial companies that together market financial products or services to you.■ Eaton Vance does not jointly market. |
26
Eaton Vance Funds
| U.S. Customer Privacy Notice — continued | March 2024 |
Page 3
Other important information | |
*PLEASE NOTE: Eaton Vance does not share your creditworthiness information or your transactions and experiences information with the Morgan Stanley Affiliates, nor does Eaton Vance enable the Morgan Stanley Affiliates to market to you. Your opt outs will prevent Eaton Vance from sharing your creditworthiness information with the Investment Management Affiliates and will prevent the Investment Management Affiliates from marketing their products to you. Vermont: Except as permitted by law, we will not share personal information we collect about Vermont residents with Nonaffiliates unless you provide us with your written consent to share such information. California: Except as permitted by law, we will not share personal information we collect about California residents with Nonaffiliates and we will limit sharing such personal information with our Affiliates to comply with California privacy laws that apply to us. |
27
Eaton Vance Funds
IMPORTANT NOTICES
Delivery of Shareholder Documents.
The Securities and Exchange Commission (SEC) permits funds to deliver only one copy of shareholder documents, including prospectuses, proxy statements and shareholder reports, to fund investors with multiple accounts at the same residential or post office box address. This practice is often called “householding” and it helps eliminate duplicate mailings to shareholders.
Equiniti Trust Company, LLC
(“
EQ
”),
the closed-end funds transfer agent, or your financial intermediary, may household the mailing of your documents indefinitely unless you instruct EQ, or your financial intermediary, otherwise.
If you would prefer that your Eaton Vance documents not be householded, please contact EQ or your financial intermediary. Your instructions that householding not apply to delivery of your Eaton Vance documents will typically be effective within 30 days of receipt by EQ or your financial intermediary.
Portfolio Holdings.
Each Eaton Vance Fund and its underlying Portfolio(s) (if applicable) files a schedule of portfolio holdings on Part F to Form N-PORT with the SEC. Certain information filed on Form N-PORT may be viewed on the Eaton Vance website at www.eatonvance.com, by calling Eaton Vance at 1-800-262-1122 or in the EDGAR database on the SEC’s website at www.sec.gov.
Proxy Voting.
From time to time, funds are required to vote proxies related to the securities held by the funds. The Eaton Vance Funds or their underlying Portfolios (if applicable) vote proxies according to a set of policies and procedures approved by the Funds’ and Portfolios’ Boards. You may obtain a description of these policies and procedures and information on how the Funds or Portfolios voted proxies relating to portfolio securities during the most recent 12-month period ended June 30, without charge, upon request, by calling 1-800-262-1122 and by accessing the SEC’s website at www.sec.gov.
Share Repurchase Program.
The Fund’s Board of Trustees has approved a share repurchase program authorizing the Fund to repurchase up to 10% of its common shares outstanding as of the last day of the prior calendar year in open-market transactions at a discount to net asset value. The repurchase program does not obligate the Fund to purchase a specific amount of shares. The Fund’s repurchase activity, including the number of shares purchased, average price and average discount to net asset value, is disclosed in the Fund’s annual and semi-annual reports to shareholders.
Additional Notice to Shareholders.
If applicable, a Fund may also redeem or purchase its outstanding preferred shares in order to maintain compliance with regulatory requirements, borrowing or rating agency requirements or for other purposes as it deems appropriate or necessary.
Closed-End Fund Information.
Eaton Vance closed-end funds make fund performance data and certain information about portfolio characteristics available on the Eaton Vance website shortly after the end of each month. Other information about the funds is available on the website. The funds’ net asset value per share is readily accessible on the Eaton Vance website. Portfolio holdings for the most recent month-end are also posted to the website approximately 30 days following the end of the month. This information is available at www.eatonvance.com on the fund information pages under “Closed-End Funds & Term Trusts.”
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| (a) |
| (b) | Not applicable. |
Item 2. Code of Ethics
Not required in this filing.
Item 3. Audit Committee Financial Expert
Not required in this filing.
Item 4. Principal Accountant Fees and Services
Not required in this filing.
Item 5. Audit Committee of Listed Registrants
Not required in this filing.
Item 6. Schedule of Investments
| (a) | Please see schedule of investments contained in the Report to Stockholders included under Item 1 of this Form N-CSR. |
| (b) | Not applicable. |
Item 7. Financial Statements and Financial Highlights for Open-End Management Investment Companies
Not applicable.
Item 8. Changes in and Disagreements with Accountants for Open-End Management Investment Companies
Not applicable.
Item 9. Proxy Disclosures for Open-End Management Investment Companies
Not applicable.
Item 10. Remuneration Paid to Directors, Officers, and Others of Open-End Management Investment Companies
Not applicable.
Item 11. Statement Regarding Basis for Approval of Investment Advisory Contract
The information is included in Item 1 of this Form N-CSR.
Item 12. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies
Not required in this filing.
Item 13. Portfolio Managers of Closed-End Management Investment Companies
Eaton Vance Management (“EVM” or “Eaton Vance”), an indirect, wholly-owned subsidiary of Morgan Stanley, is the investment adviser of the Fund. EVM has engaged its affiliate, Parametric Portfolio Associates LLC (“Parametric”), as the sub-adviser of the Fund. Charles B. Gaffney, Douglas R. Rogers, CFA, CMT, Thomas C. Seto, Xiaozhen Li and Gordon Wotherspoon comprise the investment team responsible for the overall and day-to-day management of the Fund’s investments.
Messrs. Gaffney and Rogers are Vice Presidents of Eaton Vance, have managed other Eaton Vance portfolios for more than five years, and have been portfolio managers of the Fund since May 2023. Mr. Seto is Head of Investment Management at Parametric, has managed other Eaton Vance portfolios for more than five years and has been a portfolio manager of the Fund since April 2005. Ms. Li is an Executive Director of Morgan Stanley and has been a Director, Private Client Direct Group at Parametric for more than five years. Mr. Wotherspoon is a Managing Director of Morgan Stanley and Managing Director, Advisor Channel Portfolio Management at Parametric for more than five years. Ms. Li and Mr. Wotherspoon have been portfolio managers of the Fund since July 2024.
The following table shows, as of June 30, 2024, the number of accounts each portfolio manager managed in each of the listed categories and the total assets (in millions of dollars) in the accounts managed within each category. The table also shows the number of accounts with respect to which the advisory fee is based on the performance of the account, if any, and the total assets (in millions of dollars) in those accounts.
| Number of All Accounts |
Total Assets of All Accounts |
Number of Accounts Paying a Performance Fee |
Total Assets of Accounts Paying a Performance Fee |
|||||||||||||
| Charles B. Gaffney(1) |
||||||||||||||||
| Registered Investment Companies |
12 | $ | 11,369.1 | 0 | $ | 0 | ||||||||||
| Other Pooled Investment Vehicles |
0 | $ | 0 | 0 | $ | 0 | ||||||||||
| Other Accounts |
0 | $ | 0 | 0 | $ | 0 | ||||||||||
| Douglas R. Rogers, CFA, CMT(1)(2) |
||||||||||||||||
| Registered Investment Companies |
12 | $ | 9,909.1 | 0 | $ | 0 | ||||||||||
| Other Pooled Investment Vehicles |
1 | $ | 50.7 | 0 | $ | 0 | ||||||||||
| Other Accounts |
5 | $ | 1,828.5 | 0 | $ | 0 | ||||||||||
| Xiaozhen Li |
||||||||||||||||
| Registered Investment Companies |
9 | $ | 3,303.3 | 0 | $ | 0 | ||||||||||
| Other Pooled Investment Vehicles |
0 | $ | 0 | 0 | $ | 0 | ||||||||||
| Other Accounts |
100,568 | $ | 268,707.1 | 0 | $ | 0 | ||||||||||
| Gordon Wotherspoon |
||||||||||||||||
| Registered Investment Companies |
0 | $ | 0 | 0 | $ | 0 | ||||||||||
| Other Pooled Investment Vehicles |
0 | $ | 0 | 0 | $ | 0 | ||||||||||
| Other Accounts |
100,623 | $ | 271,854.3 | 0 | $ | 0 | ||||||||||
| Thomas C. Seto(1) |
||||||||||||||||
| Registered Investment Companies |
66 | (3) | $ | 40,725.2 | 0 | $ | 0 | |||||||||
| Other Pooled Investment Vehicles |
7 | $ | 532.5 | 0 | $ | 0 | ||||||||||
| Other Accounts |
100,623 | $ | 271,854.3 | 0 | $ | 0 | ||||||||||
| (1) | This portfolio manager serves as portfolio manager of one or more registered investment companies that invests or may invest in one or more underlying registered investment companies in the Eaton Vance family of funds or other pooled investment vehicles sponsored by Eaton Vance. The underlying investment companies may be managed by this portfolio manager or another portfolio manager. |
| (2) | This portfolio manager may provide advisory services for certain of the “Other Accounts” on a nondiscretionary or model basis. For “Other Accounts” that are part of a wrap account program, the number of accounts is the number of sponsors for which the portfolio manager provides advisory services rather than the number of individual customer accounts within each wrap account program. The assets managed may include assets advised on a nondiscretionary or model basis. |
| (3) | This portfolio manager provides investment advice with respect to only a portion of the total assets of certain of these accounts. Only the assets allocated to this portfolio manager as of the Fund’s most recent fiscal year end are reflected in the table. |
The following table shows, as of June 30, 2024, the dollar range of Fund shares beneficially owned by each portfolio manager.
| Portfolio Manager |
Dollar Range of Equity Securities Beneficially Owned in the Fund | |
| Charles B. Gaffney | None | |
| Douglas R. Rogers, CFA, CMT | None | |
| Xiaozhen Li | None | |
| Gordon Wotherspoon | None | |
| Thomas C. Seto | None | |
Potential for Conflicts of Interest. It is possible that conflicts of interest may arise in connection with a portfolio manager’s management of the Fund’s investments on the one hand and the investments of other accounts for which a portfolio manager is responsible on the other. For example, a portfolio manager may have conflicts of interest in allocating management time, resources and investment opportunities among the Fund and other accounts he or she advises. In addition, due to differences in the investment strategies or restrictions between the Fund and the other accounts, the portfolio manager may take action with respect to another account that differs from the action taken with respect to the Fund. In some cases, another account managed by a portfolio manager may compensate the investment adviser based on the performance of the securities held by that account. The existence of such a performance based fee may create additional conflicts of interest for the portfolio manager in the allocation of management time, resources and investment opportunities. Whenever conflicts of interest arise, the portfolio manager will endeavor to exercise his or her discretion in a manner that he or she believes is equitable to all interested persons. EVM has adopted several policies and procedures designed to address these potential conflicts including a code of ethics and policies that govern the investment adviser’s trading practices, including among other things the aggregation and allocation of trades among clients, brokerage allocations, cross trades and best execution.
Compensation Structure for EVM
The compensation structure of Eaton Vance and its affiliates that are investment advisers (for purposes of this section “Eaton Vance”) is based on a total reward system of base salary and incentive compensation, which is paid either in the form of cash bonus, or for employees meeting the specified deferred compensation eligibility threshold, partially as a cash bonus and partially as mandatory deferred compensation. Deferred compensation granted to Eaton Vance employees is generally granted as a mix of deferred cash awards under the Investment Management Alignment Plan (IMAP) and equity-based awards in the form of stock units. The portion of incentive compensation granted in the form of a deferred compensation award and the terms of such awards are determined annually by the Compensation, Management Development and Succession Committee of the Board of Directors of Eaton Vance’s parent company, Morgan Stanley.
Base salary compensation. Generally, portfolio managers and research analysts receive base salary compensation based on the level of their position with the adviser.
Incentive compensation. In addition to base compensation, portfolio managers and research analysts may receive discretionary year-end compensation. Incentive compensation may include:
| • | Cash bonus |
| • | Deferred compensation: |
| • | A mandatory program that defers a portion of incentive compensation into restricted stock units or other awards based on Morgan Stanley common stock or other plans that are subject to vesting and other conditions. |
| • | IMAP is a cash-based deferred compensation plan designed to increase the alignment of participants’ interests with the interests of clients. For eligible employees, a portion of their deferred compensation is mandatorily deferred into IMAP on an annual basis. Awards granted under IMAP are notionally invested in referenced funds available pursuant to the plan, which are funds advised by MSIM and its affiliates including Eaton Vance. Portfolio managers are required to notionally invest a minimum of 40% of their account balance in the designated funds that they manage and are included in the IMAP notional investment fund menu. |
| • | Deferred compensation awards are typically subject to vesting over a multi-year period and are subject to cancellation through the payment date for competition, cause (i.e., any act or omission that constitutes a breach of obligation to the Funds, including failure to comply with internal compliance, ethics or risk management standards, and failure or refusal to perform duties satisfactorily, including supervisory and management duties), disclosure of proprietary information, and solicitation of employees or clients. Awards are also subject to clawback through the payment date if an |
| employee’s act or omission (including with respect to direct supervisory responsibilities) causes a restatement of the firm’s consolidated financial results, constitutes a violation of the firm’s global risk management principles, policies and standards, or causes a loss of revenue associated with a position on which the employee was paid and the employee operated outside of internal control policies. |
Eaton Vance compensates employees based on principles of pay-for-performance, market competitiveness and risk management. Eligibility for, and the amount of any, discretionary compensation is subject to a multi-dimensional process. Specifically, consideration is given to one or more of the following factors, which can vary by portfolio management team and circumstances:
| • | Revenue and profitability of the business and/or each fund/account managed by the portfolio manager |
| • | Individual contribution and performance |
| • | Contribution to client objectives |
| • | Revenue and profitability of the firm |
| • | Return on equity and risk factors of both the business units and Morgan Stanley |
| • | Assets managed by the portfolio manager |
| • | External market conditions |
| • | New business development and business sustainability |
| • | Team, product and/or Eaton Vance performance |
| • | The pre-tax investment performance of the funds/accounts managed by the portfolio manager (1) (which may, in certain cases, be measured against the applicable benchmark(s) and/or peer group(s) over one, three and five-year periods), (2) provided that for funds that are tax-managed or otherwise have an objective of after-tax returns, performance net of taxes will be considered |
Further, the firm’s Global Incentive Compensation Discretion Policy requires compensation managers to consider Further the only legitimate, business related factors when exercising discretion in determining variable incentive compensation, including adherence to Morgan Stanley’s core values, conduct, disciplinary actions in the current performance year, risk management and risk outcomes.
| (1) | Generally, this is total return performance, provided that consideration may also be given to relative risk-adjusted performance. |
| (2) | When a fund’s peer group as determined by Lipper or Morningstar is deemed by the relevant Eaton Vance Chief Investment Officer, or in the case of the sub-advised Funds, the Director of Product Development and Sub-Advised Funds, not to provide a fair comparison, performance may instead be evaluated primarily against a custom peer group or market index. |
Item 14. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers
No such purchases this period.
Item 15. Submission of Matters to a Vote of Security Holders
There have been no material changes to the procedures by which shareholders may recommend nominee to the Fund’s Board of Trustees since the Fund last provided disclosure in response to this item.
Item 16. Controls and Procedures
| (a) | It is the conclusion of the registrant’s principal executive officer and principal financial officer that the effectiveness of the registrant’s current disclosure controls and procedures (such disclosure controls and procedures having been evaluated within 90 days of the date of this filing) provide reasonable assurance that the information required to be disclosed by the registrant has been recorded, processed, summarized and reported within the time period specified in the Commission’s rules and forms and that the information required to be disclosed by the registrant has been accumulated and communicated to the registrant’s principal executive officer and principal financial officer in order to allow timely decisions regarding required disclosure. |
| (b) | There have been no changes in the registrant’s internal controls over financial reporting during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting. |
Item 17. Disclosure of Securities Lending Activities for Closed-End Management Investment Companies
No activity to report for the registrant’s most recent fiscal year end.
Item 18. Recovery of Erroneously Awarded Compensation
Not applicable.
Item 19. Exhibits
| (a)(1) | Registrant’s Code of Ethics – Not applicable (please see Item 2). | |
| (a)(2)(i) | Principal Financial Officer’s Section 302 certification. | |
| (a)(2)(ii) | Principal Executive Officer’s Section 302 certification. | |
| (b) | Combined Section 906 certification. | |
| (c) | Registrant’s notices to shareholders pursuant to Registrant’s exemptive order granting an exemption from Section 19(b) of the 1940 Act and Rule 19b-1 thereunder regarding distributions paid pursuant to the Registrant’s Managed Distribution Plan. | |
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 Tax-Managed Buy-Write Opportunities Fund
| By: | /s/ R. Kelly Williams, Jr. | |
| R. Kelly Williams, Jr. | ||
| Principal Executive Officer | ||
| Date: | August 23, 2024 | |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
| By: | /s/ James F. Kirchner | |
| James F. Kirchner | ||
| Principal Financial Officer | ||
| Date: | August 23, 2024 | |
| By: | /s/ R. Kelly Williams, Jr. | |
| R. Kelly Williams, Jr. | ||
| Principal Executive Officer | ||
| Date: | August 23, 2024 | |