Overview

 

Strong Morningstar Ratings A Shares as of 3/31/14.1

Average Annual Returns (%) as of Mar 31, 2014

1 Month 3 Months YTD 1 Year 3 Years 5 Years 10 Years
Fund at NAV -0.07 1.04 1.04 -0.48 1.53 2.45 3.63
Fund w/Max Sales Charge -4.88 -3.70 -3.70 -5.19 -0.10 1.45 3.13
Barclays U.S. Intermediate Government Bond Index2 -0.39 0.64 0.64 -0.76 2.35 2.35 3.57
Past performance is no guarantee of future results. Investment return and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. 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 historical and are calculated by determining the percentage change in net asset value (NAV) with all distributions reinvested. Returns for other classes of shares offered by the Fund are different. Performance less than one year is cumulative. Max Sales Charge: 4.75%.

Fund Facts as of Mar 31, 2014

Class A Inception 08/24/1984
Investment Objective High current return
Total Net Assets $639.5M
Minimum Investment $1000
Expense Ratio3 1.12%
CUSIP 277911103


Portfolio Management

Susan Schiff, CFA Managed Fund since 1992

 

Portfolio profile subject to change due to active management. Percentages may not total 100% due to rounding. 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.

About Risk 

An imbalance in supply and demand in the income market may result in valuation uncertainties and greater volatility, less liquidity, widening credit spreads and a lack of price transparency in the market. As interest rates rise, the value of certain income investments is likely to decline. Investments in income securities may be affected by changes in the creditworthiness of the issuer and are subject to the risk of non–payment of principal and interest. The value of income securities also may decline because of real or perceived concerns about the issuer's ability to make principal and interest payments. While certain U.S. government-sponsored agencies may be chartered or sponsored by acts of Congress, their securities are neither issued nor guaranteed by the U.S. Treasury. Derivatives instruments can be used to take both long and short positions, be highly volatile, result in economic leverage (which can magnify losses), and involve risks in addition to the risks of the underlying instrument on which the derivative is based, such as counterparty, correlation and liquidity risk. If a counterparty is unable to honor its commitments, the value of Fund shares may decline and/or the Fund could experience delays in the return of collateral or other assets held by the counterparty. No Fund is a complete investment program and you may lose money investing in a Fund. The Fund may engage in other investment practices that may involve additional risks and you should review the Fund prospectus for a complete description.


Performance

Average Annual Returns (%) as of Mar 31, 2014

1 Month 3 Months YTD 1 Year 3 Years 5 Years 10 Years
Fund at NAV -0.07 1.04 1.04 -0.48 1.53 2.45 3.63
Fund w/Max Sales Charge -4.88 -3.70 -3.70 -5.19 -0.10 1.45 3.13
Barclays U.S. Intermediate Government Bond Index2 -0.39 0.64 0.64 -0.76 2.35 2.35 3.57
Morningstar™ Short Government Category4 -0.17 0.31 0.31 -0.57 0.84 1.56 2.46
Past performance is no guarantee of future results. Investment return and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. 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 historical and are calculated by determining the percentage change in net asset value (NAV) with all distributions reinvested. Returns for other classes of shares offered by the Fund are different. Performance less than one year is cumulative. Max Sales Charge: 4.75%.

Calendar Year Returns (%)

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Fund at NAV 2.23 2.43 4.06 7.24 7.37 5.32 4.35 3.64 1.83 -1.53
Barclays U.S. Intermediate Government Bond Index2 2.33 1.68 3.84 8.47 10.43 -0.32 4.98 6.08 1.73 -1.25

Fund Facts

Expense Ratio3 1.12%
Class A Inception 08/24/1984
Distribution Frequency Monthly

Yield Information5 as of Mar 31, 2014

Distribution Rate at NAV 4.23%
SEC 30 Day Yield 2.06%


Morningstar™ Ratings as of Mar 31, 2014

Time Period Rating Rating (Load Waived) Funds in
Short Government
Category
Overall *** ***** 135
3 Years * **** 135
5 Years *** **** 125
10 Years **** ***** 114
Based on Risk-Adjusted Returns.

The Overall Morningstar Rating for a fund is derived from a weighted average of the performance figures associated with its 3-, 5- and 10-year (if applicable) Morningstar Rating metrics.

© 2013 Morningstar, Inc. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers is responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results. For each fund with at least a three-year history, Morningstar calculates a Morningstar Rating™ based on how a fund ranks on a Morningstar Risk-Adjusted Return measure against other funds in the same category. This measure takes into account variations in a fund's monthly performance after adjusting for sales loads (except for load-waived A shares) redemption fees, and the risk-free rate, placing more emphasis on downward variations and rewarding consistent performance. The top 10% of funds in each category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars and the bottom 10% receive 1 star. Load-waived A share star ratings do not include any front-end sales load and are intended for those investors who have access to such purchase terms (e.g., plan participants of a defined contribution plan). Not all A share mutual funds for which Morningstar calculates a load-waived A share star rating may actually waive their front-end sales load. Therefore, Morningstar strongly encourages investors to contact their investment professional to determine whether they are eligible to purchase the A share without paying the front load. The Morningstar Rating may differ among share classes of a mutual fund as a result of different sales loads and/or expense structure.

NAV History

Date NAV NAV Change
Apr 16, 2014 $6.90 $0.00
Apr 15, 2014 $6.90 $0.00
Apr 14, 2014 $6.90 $-0.01
Apr 11, 2014 $6.91 $0.00
Apr 10, 2014 $6.91 $0.01
Apr 09, 2014 $6.90 $0.00
Apr 08, 2014 $6.90 $0.00
Apr 07, 2014 $6.90 $-0.01
Apr 04, 2014 $6.91 $0.01
Apr 03, 2014 $6.90 $0.01

Distribution History6

Ex-Date Distribution Reinvest NAV
Mar 31, 2014 $0.02480 $6.90
Feb 28, 2014 $0.02240 $6.93
Jan 31, 2014 $0.02480 $6.93
Dec 31, 2013 $0.02480 $6.90
Dec 30, 2013 $0.03010 $6.91
Nov 29, 2013 $0.02400 $6.97
Oct 31, 2013 $0.02401 $6.97
Sep 30, 2013 $0.02260 $6.98
Aug 30, 2013 $0.02336 $6.95
Jul 31, 2013 $0.02336 $7.01
View All
No records in this table indicates that there has not been a distribution greater than .0001 within the past 3 years.
Fund prospectus

Capital Gain History6

Ex-Date Short-Term Long-Term Reinvest NAV
No records in this table indicates that there has not been a capital gain greater than .0001 within the past 3 years.
Fund prospectus

Past performance is no guarantee of future results. Investment return and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Performance is as of month-end for the stated time period only; due to market volatility, the Fund's current performance may be lower or higher than quoted. For the Eaton Vance Fund's performance as of the most recent month end, please refer to eatonvance.com. Returns are historical and are calculated by determining the percentage change in net asset value (NAV) with all distributions reinvested. Returns shown at NAV unless noted otherwise. Returns for other classes of shares offered by the Fund are different. It is not possible to invest in an index.

 

Portfolio profile subject to change due to active management. Percentages may not total 100% due to rounding. 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.

About Risk 

An imbalance in supply and demand in the income market may result in valuation uncertainties and greater volatility, less liquidity, widening credit spreads and a lack of price transparency in the market. As interest rates rise, the value of certain income investments is likely to decline. Investments in income securities may be affected by changes in the creditworthiness of the issuer and are subject to the risk of non–payment of principal and interest. The value of income securities also may decline because of real or perceived concerns about the issuer's ability to make principal and interest payments. While certain U.S. government-sponsored agencies may be chartered or sponsored by acts of Congress, their securities are neither issued nor guaranteed by the U.S. Treasury. Derivatives instruments can be used to take both long and short positions, be highly volatile, result in economic leverage (which can magnify losses), and involve risks in addition to the risks of the underlying instrument on which the derivative is based, such as counterparty, correlation and liquidity risk. If a counterparty is unable to honor its commitments, the value of Fund shares may decline and/or the Fund could experience delays in the return of collateral or other assets held by the counterparty. No Fund is a complete investment program and you may lose money investing in a Fund. The Fund may engage in other investment practices that may involve additional risks and you should review the Fund prospectus for a complete description.


Portfolio

Asset Mix (%)7 as of Mar 31, 2014

Fixed Rate 30yr MBS coupon< 8% 61.51
Adjustable Rate MBS 15.19
Fixed Rate 30yr MBS coupon >8% 9.67
Fixed Rate 15 & 20yr MBS 4.41
Fixed Rate CMOs 4.39
Short Term Investments 2.11
U.S. Government Agency Obligations 1.17
U.S. Treasuries 1.14
Floating Rate CMOs 0.41
Total 100.00

Portfolio Statistics as of Mar 31, 2014

Number of Holdings 576
Average Coupon 6.21%
Average Duration 2.64 yrs.


Credit Quality (%)8 as of Mar 31, 2014

AAA 100.00
AA 0.00
A 0.00
BBB 0.00
BB 0.00
B 0.00
CCC or Lower 0.00
Not Rated 0.00
Total 100.00
Ratings are based on Moody's, S&P or Fitch, as applicable. If securities are rated differently by the rating agencies, the higher rating is applied. Ratings, which are subject to change, apply to the creditworthiness of the issuers of the underlying securities and not to the Fund or its shares. Credit ratings measure the quality of a bond based on the issuer's creditworthiness, with ratings ranging from AAA, being the highest, to D, being the lowest based on S&P's measures. Ratings of BBB or higher by S&P's or Fitch (Baa or higher by Moody's) are considered to be investment grade quality. Credit ratings are based largely on the rating agency's analysis at the time of rating. The rating assigned to any particular security is not necessarily a reflection of the issuer's current financial condition and does not necessarily reflect its assessment of the volatility of a security's market value or of the liquidity of an investment in the security. Holdings designated as "Not Rated" are not rated by the national rating agencies stated above.


 

Portfolio profile subject to change due to active management. Percentages may not total 100% due to rounding. 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.

About Risk 

An imbalance in supply and demand in the income market may result in valuation uncertainties and greater volatility, less liquidity, widening credit spreads and a lack of price transparency in the market. As interest rates rise, the value of certain income investments is likely to decline. Investments in income securities may be affected by changes in the creditworthiness of the issuer and are subject to the risk of non–payment of principal and interest. The value of income securities also may decline because of real or perceived concerns about the issuer's ability to make principal and interest payments. While certain U.S. government-sponsored agencies may be chartered or sponsored by acts of Congress, their securities are neither issued nor guaranteed by the U.S. Treasury. Derivatives instruments can be used to take both long and short positions, be highly volatile, result in economic leverage (which can magnify losses), and involve risks in addition to the risks of the underlying instrument on which the derivative is based, such as counterparty, correlation and liquidity risk. If a counterparty is unable to honor its commitments, the value of Fund shares may decline and/or the Fund could experience delays in the return of collateral or other assets held by the counterparty. No Fund is a complete investment program and you may lose money investing in a Fund. The Fund may engage in other investment practices that may involve additional risks and you should review the Fund prospectus for a complete description.


Insights & Analysis

Quarterly Commentary

A Word On The Markets  as of Mar 31, 2014

The first quarter began with a changing of the guard at the Federal Reserve (Fed), as Janet Yellen replaced Ben Bernanke as Fed chair. Signs of sluggish economic growth did not deter the Fed from continuing to taper its bond-buying program. An unusually harsh winter caused the Fed and many market watchers to question the validity of the incoming economic data, leading many economists to downgrade their estimates for first-quarter U.S. GDP growth, while dismissing the slowdown as transitory.

At each of its two policy meetings during the quarter, the Fed trimmed its monthly bond purchases by $10 billion. The central bank held short-term interest rates near zero, but said that it would base future rate decisions on a broad range of economic indicators. This clouded the outlook for monetary policy, as previous guidance had referenced 6.5% unemployment as the Fed’s threshold for considering rate hikes.

Amid continued tapering, yields on the long end of the Treasury yield curve actually fell during the first quarter. Yields on the shorter end of the curve rose modestly during the quarter, as investors pulled forward their views on the timing of the first hike in the fed funds rate after Yellen said the Fed could begin raising the target rate as soon as six months after the end of the tapering program.

Higher mortgage rates from the fourth quarter of 2013 continued to impact mortgage prepayment rates during the period, as seasoned mortgage-backed securities’ (MBS) prepayment speeds finished the quarter at their lowest level in years. The Mortgage Bankers Association Refinance Index9 remains at depressed levels, which may lead to muted prepayment speeds going forward. Generic MBS spreads experienced a slight widening relative to U.S. Treasurys during the quarter, while seasoned agency MBS actually saw spreads to U.S. Treasurys tighten10 during the period, as an expected decline in prepayment speeds brought more buyers into the space.

Performance Summary 

Eaton Vance Government Obligations Fund (the Fund) outperformed its benchmark, the Barclays Capital U.S. Intermediate Government Index (the Index),2 at net asset value for the quarter.

  • The Fund benefited from its investments in seasoned agency MBS, which outperformed Treasurys during the quarter due to spread tightening and the additional yield they offered relative to U.S. Treasurys.
  • Rising mortgage rates led to a decline in prepayments of the Fund’s high-coupon, seasoned agency MBS, which created additional yield relative to Treasurys during the quarter, aiding the Fund’s performance.

Average Annual Returns (%) as of Mar 31, 2014

1 Month 3 Months YTD 1 Year 3 Years 5 Years 10 Years
Fund at NAV -0.07 1.04 1.04 -0.48 1.53 2.45 3.63
Fund w/Max Sales Charge -4.88 -3.70 -3.70 -5.19 -0.10 1.45 3.13
Barclays U.S. Intermediate Government Bond Index2 -0.39 0.64 0.64 -0.76 2.35 2.35 3.57
Past performance is no guarantee of future results. Investment return and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. 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 historical and are calculated by determining the percentage change in net asset value (NAV) with all distributions reinvested. Returns for other classes of shares offered by the Fund are different. Performance less than one year is cumulative. Max Sales Charge: 4.75%.

Fund Facts as of Mar 31, 2014

Class A Inception 08/24/1984
Expense Ratio3 1.12%


Contributors 

Factors contributing to the Fund’s relative performance compared to the Index during the quarter:

  • The Fund benefited from its investments in seasoned agency MBS, which outperformed Treasurys for the quarter, as spreads tightened.
  • Higher mortgage rates at the end of 2013 led to declining prepayment speeds on the Fund’s seasoned high-coupon agency MBS in the first quarter, which aided Fund performance relative to the Index.

Detractors 

Factors detracting from the Fund’s relative performance compared to the Index during the quarter:

  • Falling yields on the long end of the Treasury yield curve11 led to underperformance of bonds with durations12 shorter than those of the Index.

Investment Outlook And Fund Positioning 

Looking ahead, management believes the Fed will remain extremely accommodative. Although the Fed may continue to taper its MBS and Treasury purchases over the coming months and stop purchases altogether by the end of 2014, we think that muted inflation and a moderate recovery in the labor market will likely keep the central bank from hiking interest rates in the coming year.

Despite the Fed’s continued tapering of MBS purchases, we believe the MBS market continues to hold value relative to most other U.S. government securities. Supply/demand technicals remain supportive of agency MBS spreads even with the continued reduction in Fed purchases. The Fed continues to purchase over $25 billion in new bonds on a net basis per month, which is more than the total net issuance created in a given month. We believe that high coupon, seasoned agency MBS continue to offer the most value in the agency MBS market and do not have the extension risk that lower coupon generic MBS have, which may be valuable if rates rise.

 

The views expressed in this report are those of 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 disclaims 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.

 

Portfolio profile subject to change due to active management. Percentages may not total 100% due to rounding. 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.

About Risk 

An imbalance in supply and demand in the income market may result in valuation uncertainties and greater volatility, less liquidity, widening credit spreads and a lack of price transparency in the market. As interest rates rise, the value of certain income investments is likely to decline. Investments in income securities may be affected by changes in the creditworthiness of the issuer and are subject to the risk of non–payment of principal and interest. The value of income securities also may decline because of real or perceived concerns about the issuer's ability to make principal and interest payments. While certain U.S. government-sponsored agencies may be chartered or sponsored by acts of Congress, their securities are neither issued nor guaranteed by the U.S. Treasury. Derivatives instruments can be used to take both long and short positions, be highly volatile, result in economic leverage (which can magnify losses), and involve risks in addition to the risks of the underlying instrument on which the derivative is based, such as counterparty, correlation and liquidity risk. If a counterparty is unable to honor its commitments, the value of Fund shares may decline and/or the Fund could experience delays in the return of collateral or other assets held by the counterparty. No Fund is a complete investment program and you may lose money investing in a Fund. The Fund may engage in other investment practices that may involve additional risks and you should review the Fund prospectus for a complete description.


Attribution

 

No attribution information is available.

 

Portfolio profile subject to change due to active management. Percentages may not total 100% due to rounding. 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.

About Risk 

An imbalance in supply and demand in the income market may result in valuation uncertainties and greater volatility, less liquidity, widening credit spreads and a lack of price transparency in the market. As interest rates rise, the value of certain income investments is likely to decline. Investments in income securities may be affected by changes in the creditworthiness of the issuer and are subject to the risk of non–payment of principal and interest. The value of income securities also may decline because of real or perceived concerns about the issuer's ability to make principal and interest payments. While certain U.S. government-sponsored agencies may be chartered or sponsored by acts of Congress, their securities are neither issued nor guaranteed by the U.S. Treasury. Derivatives instruments can be used to take both long and short positions, be highly volatile, result in economic leverage (which can magnify losses), and involve risks in addition to the risks of the underlying instrument on which the derivative is based, such as counterparty, correlation and liquidity risk. If a counterparty is unable to honor its commitments, the value of Fund shares may decline and/or the Fund could experience delays in the return of collateral or other assets held by the counterparty. No Fund is a complete investment program and you may lose money investing in a Fund. The Fund may engage in other investment practices that may involve additional risks and you should review the Fund prospectus for a complete description.


Management

Biography
Susan Schiff, CFA

Susan Schiff, CFA

Vice President, Eaton Vance Management
Joined Eaton Vance 1985

Susan Schiff is a vice president of Eaton Vance Management and portfolio manager on Eaton Vance's Global Income Group.

Susan joined Eaton Vance in 1985 and became a portfolio manager in 1991. Prior to joining Eaton Vance, she was affiliated with PaineWebber, Inc.

Susan earned a B.S. in finance from St. John Fisher College in 1983. She is a CFA charterholder and a member of the Boston Security Analysts Society.

Education
  • B.S. St. John Fisher College
Experience
  • Managed Fund since 1992
 

Fund Literature

Fund Literature

Annual Report

Commentary

Income Markets Review

Income Markets Snapshot

Discover Opportunities in the Income Markets with Eaton Vance

Fact Sheet

Full Prospectus

Government Obligations Holdings

Holdings-1st or 3rd fiscal quarters-www.sec.gov

SAI

Think Performance Think Eaton Vance

Semi-Annual Report

Summary Prospectus

XBRL


 

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    Symbol:  

    NAV as of