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Eaton Vance launches Tax-Advantaged Bond Strategies Fund

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Boston-based Eaton Vance Distributors has announced the launch of the Eaton Vance Tax-Advantaged Bond Strategies Fund as successor to a private investment fund with substantially the sa

Boston-based Eaton Vance Distributors has announced the launch of the Eaton Vance Tax-Advantaged Bond Strategies Fund as successor to a private investment fund with substantially the same objective, policies and strategies that was established in 1991.

The fund offers three classes of shares for purchase, each with a minimum investment of USD1,000.

The Tax-Advantaged Bond Strategies Fund is the newest addition to the suite of tax-advantaged income funds offered by Eaton Vance. The fund’s investment objective is after-tax total return.

Under normal market circumstances, the fund invests at least 80 per cent of its net assets in a diversified portfolio of municipal obligations that are exempt from regular federal income tax, direct obligations of the US Treasury and/or obligations of US government agencies, instrumentalities and government-sponsored enterprises.

The fund normally invests in municipal securities rated in the two highest rating categories (those rated AA or Aa or higher) at the time of purchase, but may also invest up to 20 per cent of its net assets in municipal securities rated at least A3 or A- at the time of purchase. It currently targets an average portfolio duration of approximately two to six years. It may invest in securities of any maturity or duration, and may in the future alter its duration target range.

Unlike most tax-advantaged bond strategies, the fund has the flexibility to invest in municipal securities, treasury securities and/or agency securities in pursuit of its objective of after-tax returns.

Jim Evans, director of the tax-advantaged bond strategies (Tabs) division of Eaton Vance Management and portfolio manager of the fund, says: "We employ a quantitatively driven, relative value approach that seeks to take advantage of inefficiencies in high quality fixed-income markets. We have employed a similar approach to the management of separate accounts for the past 16 years."

Payson Swaffield, chief income investment officer of Eaton Vance, adds: "The fund complements Eaton Vance’s municipal income funds with an investment option that is truly unique. The Tabs team’s quantitative and systematic approach to sector allocation and security selection has historically resulted in attractive risk-adjusted, after-tax returns and relatively low volatility."

Eaton Vance acquired the Tabs business from M.D. Sass Investors Services in December 2008. Its tax-advantaged income products are offered directly to institutional and family office clients and to retail investors through financial intermediaries.

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