Tax-Managed Global Dividend Income Fund (A) Share
Class

A

• A
• B
• C
• I

A Word On The Markets  as of Mar 31, 2013

Global equity markets surged ahead in the first quarter of 2013, as several major stock indexes set or neared record highs. Positive economic trends overcame headwinds ranging from recent tax hikes to renewed turmoil in Europe. In the U.S., encouraging news on the jobs front helped drive equity share prices upward. Unemployment fell to 7.7% in February, its lowest level in more than four years, as employers added 236,000 jobs. In addition, surprisingly strong U.S. retail sales helped ease concerns that consumers might spend less amid higher taxes and still-high energy prices. In the housing market, rising demand and more limited supply lifted home values, helping to boost consumer confidence and spending.

Mandatory government spending cuts under the so-called “sequester” barely hampered U.S. stocks' advance. Equities continued to draw support from the U.S. Federal Reserve, which reiterated its intention to maintain stimulus policies until its unemployment and growth targets are met. Global equities also demonstrated a degree of resiliency, with European stocks declining only modestly in response to Cyprus’ banking crisis in late March.

Reflecting the breadth of the first-quarter rally, major stock market indexes recorded strong gains across geographies and equity categories. In the U.S., the Dow Jones Industrial Average¹⁰ returned 11.93% and hit an all-time closing high during the quarter. The broader S&P 500 Index¹¹ also reached a new high on the quarter’s final trading day, rising 10.61% for the period. Globally, the MSCI EAFE Index¹² gained 5.13%. Small-cap stocks generally fared better than their large-cap counterparts during the quarter. Among large caps, value stocks outpaced growth stocks, while the reverse was true among small caps.

Performance Summary 

Eaton Vance Tax-Managed Global Dividend Income Fund (the Fund) underperformed its benchmark, the MSCI World Index (the Index),² for the quarter ended March 31, 2013, returning 5.50% for Class A shares at net asset value versus the Index’s 7.73% return.

• Reflecting the continued recovery in world equity markets, 20 of the 24 countries in the Index posted positive returns for the quarter, including six countries with double-digit gains.
• Nine of the 10 sectors in the Index delivered positive returns for the quarter. The more defensive health care and consumer staples sectors were the best performers in the Index, while the more cyclical materials and information technology sectors were the worst performers.
• Preferred securities, as measured by the BofA Merrill Lynch Fixed Rate Preferred Securities Index,¹³ underperformed the Index for the quarter. As of March 31, 2013, preferred securities comprised 23.00% of the Fund’s total net assets.

Contributors 

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

• Stock selection in the materials sector helped the Fund’s performance relative to the Index for the quarter, as did the Fund’s overweight positions in the health care and consumer staples sectors and its underweight in the energy sector.
• Energy company Phillips 66 and health care firm Covidien PLC were among the Fund’s top individual performance contributors for the quarter.
• Information technology name Accenture PLC, consumer staples company Mondelez International and bank PNC Financial also added to the Fund’s relative performance.

Detractors 

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

• Stock selection in the consumer staples, consumer discretionary and health care sectors detracted from the Fund’s performance relative to the Index for the quarter, as did the Fund’s overweight position in the information technology sector and its allocation to preferred securities.
• Energy firm ENI S.p.A. and consumer staples company Orkla ASA were among the Fund’s largest individual performance detractors for the quarter.
• Information technology name Oracle, materials firm Freeport-McMoRan Copper & Gold and bank Barclays PLC also hurt the Fund’s relative performance.

Investment Outlook And Fund Positioning 

To some extent, the powerful equity market rally during the first quarter reflects mounting investor confidence in longer-term economic prospects. In contrast to the persistent volatility of recent years, markets worldwide have been demonstrating a greater ability to absorb the impact of periodic macro crises such as Cyprus – a possible sign of investors’ optimism that the global economic recovery is on firmer footing. The U.S. economy appears to be in better shape than much of the rest of the world, but is still growing at a fairly slow pace.

Ongoing commitment by the Federal Reserve and other central banks to keep easy-money policies in place should continue to support economic growth and equity markets. However, investors are likely to keep a wary eye on upcoming U.S. budget negotiations, as well as further developments out of Europe.

We believe the equity market continues to present attractive opportunities in global, dividend-paying companies.

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.

About Risk 

Fund share values are sensitive to stock market volatility. Changes in the dividend policies of companies could make it difficult to provide a predictable level of income. Investments in foreign instruments or currencies can involve greater risk and volatility than U.S. investments because of adverse market, economic, political, regulatory, geopolitical or other conditions. Dividend capture strategies may result in higher portfolio turnover, increased trading costs and potential for capital loss or gain. When interest rates rise, the value of preferred stocks will generally decline. Market conditions may limit the ability to generate tax losses or to generate dividend income taxed at favorable tax rates. The Fund's ability to utilize various tax-managed techniques may be curtailed or eliminated in the future by tax legislation or regulation. 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.

No attribution information is available.

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

About Risk 

Fund share values are sensitive to stock market volatility. Changes in the dividend policies of companies could make it difficult to provide a predictable level of income. Investments in foreign instruments or currencies can involve greater risk and volatility than U.S. investments because of adverse market, economic, political, regulatory, geopolitical or other conditions. Dividend capture strategies may result in higher portfolio turnover, increased trading costs and potential for capital loss or gain. When interest rates rise, the value of preferred stocks will generally decline. Market conditions may limit the ability to generate tax losses or to generate dividend income taxed at favorable tax rates. The Fund's ability to utilize various tax-managed techniques may be curtailed or eliminated in the future by tax legislation or regulation. 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.