SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, For Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
Eaton Vance Mutual Funds Trust
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i) (1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
EV CLASSIC STRATEGIC INCOME FUND
EV MARATHON STRATEGIC INCOME FUND
24 FEDERAL STREET, BOSTON, MASS. 02110
January 21, 1997
Dear Shareholders:
On Wednesday, February 26, 1997, a Special Meeting of Shareholders of
EV Classic Strategic Income Fund and EV Marathon Strategic Income Fund (each a
"Fund"), series of Eaton Vance Mutual Funds Trust (the "Trust"), will be held to
vote on three proposals. Adoption of these proposals, which the Trust's Trustees
have approved and believe are in the best interests of each Fund and its
shareholders, are being submitted for your approval. As a shareholder, you are
entitled to cast one vote for each share that you own.
VOTING ONLY TAKES A FEW MINUTES - PLEASE RESPOND PROMPTLY.
YOUR VOTE IS IMPORTANT, NO MATTER HOW MANY SHARES YOU OWN. If the
required votes are not received by February 26, 1997, it will be necessary to
send further mailings to secure it. This is a costly process and is paid for by
the Funds. Therefore, you, as a shareholder, ultimately pay for the expense of a
delayed vote. Please sign and return your proxy promptly to avoid this
unnecessary expense.
One purpose of the Meeting is to consider a proposal to modify each
Fund's investment objective. A second proposal would permit each Fund to invest
a substantial part of its assets in another investment company sponsored by
Eaton Vance Management with consistent, but somewhat different investment
policies than the Funds. Implementation of these proposals increase investment
flexibility and efficiency, which may reduce expenses and enhance shareholder
returns. Shareholders are also asked to ratify the selection of the Funds'
independent accountants.
The matters to be presented to the Meeting are described in detail in
the enclosed proxy statement. THE TRUSTEES BELIEVE THAT ALL OF THE PROPOSALS ARE
IN THE BEST INTERESTS OF THE FUNDS AND THEIR SHAREHOLDERS.
For the Board of Trustees
/s/ M. Dozier Gardner
----------------------------------------
M. Dozier Gardner, President and Trustee
- --------------------------------------------------------------------------------
THIS IS AN IMPORTANT MEETING. IF YOU DO NOT PLAN TO
ATTEND IN PERSON, PLEASE SIGN, DATE AND RETURN THE
ENCLOSED PROXY CARD TODAY
- --------------------------------------------------------------------------------
EV CLASSIC STRATEGIC INCOME FUND
EV MARATHON STRATEGIC INCOME FUND
24 FEDERAL STREET, BOSTON, MASS. 02110
Notice of Special Meeting of Shareholders
To Be Held February 26, 1997
A Special Meeting of the Shareholders of EV Classic Strategic Income
Fund and EV Marathon Strategic Income Fund (each a "Fund"), series of Eaton
Vance Mutual Funds Trust (the "Trust"), will be held at the principal office of
the Trust, 24 Federal Street, Boston, Massachusetts, on Wednesday, February 26,
1997, at 10:00 A.M. (Boston time), for the following purposes:
1. To consider and act upon a proposal to modify the investment
objective of each Fund.
2. To consider and act upon a proposal to adopt a revised
investment structure wherein each Fund would have the ability
to invest in one or more other investment companies sponsored
by Eaton Vance Management with consistent, but somewhat
different investment policies than the Funds.
3. To ratify the selection of Coopers & Lybrand, L.L.P. as the
independent accountants of each Fund.
4. To consider and act upon any matters incidental to the
foregoing purposes or any of them, and any other matters
which may properly come before said meeting or an adjourned
session thereof.
These proposals are discussed in greater detail in the attached Proxy
Statement.
This meeting is called pursuant to the By-Laws of the Trust. The
Trustees have fixed the close of business on December 31, 1996, as the record
date for the determination of the shareholders of the Fund entitled to notice of
and to vote at the meeting and any adjournments thereof.
/s/ Thomas Otis
----------------------
Thomas Otis, Secretary
January 21, 1997
IMPORTANT -- SHAREHOLDERS CAN HELP THE TRUSTEES AVOID THE NECESSITY AND
ADDITIONAL EXPENSE TO THE FUNDS OF FURTHER SOLICITATIONS TO INSURE A QUORUM BY
PROMPTLY RETURNING THE ENCLOSED PROXY. THE ENCLOSED ADDRESSED ENVELOPE REQUIRES
NO POSTAGE IF MAILED IN THE UNITED STATES AND IS INTENDED FOR YOUR CONVENIENCE.
EV CLASSIC STRATEGIC INCOME FUND
EV MARATHON STRATEGIC INCOME FUND
24 Federal Street
Boston, Massachusetts 02110
January 21, 1997
PROXY STATEMENT
FOR THE SPECIAL MEETING OF SHAREHOLDERS
A proxy is enclosed with the foregoing Notice of the Special Meeting of
the Shareholders of EV Classic Strategic Income Fund and EV Marathon Strategic
Income Fund (each a "Fund"), series of Eaton Vance Mutual Funds Trust (the
"Trust"), to be held on Wednesday, February 26, 1997, for the benefit of
shareholders who do not expect to be present at the meeting. This proxy is
solicited on behalf of the Trustees of the Trust, and is revocable by the person
giving it prior to exercise by a signed writing filed with the Funds' transfer
agent, First Data Investors Services Group, Attention: Eaton Vance Funds, P.O.
Box 5123, Westborough, MA 01581-5123, or by executing and delivering a later
dated proxy, or by attending the meeting and voting his shares in person. Each
shareholder may specify the manner in which he desires his proxy to be voted
upon the matters referred to in the proxy; in the absence of such specification,
his proxy will authorize the persons named as attorneys, or any of them, to vote
in favor of each such matter. This proxy material is being initially mailed to
shareholders on or about January 21, 1997.
The Trustees have fixed the close of business on December 31, 1996, as
the record date for the determination of the shareholders entitled to notice of
and to vote at the meeting and any adjournments thereof. Shareholders at the
close of business on the record date will be entitled to one vote for each share
held. As of December 31, 1996, the number of shares of beneficial interest of EV
Classic Strategic Income Fund and EV Marathon Strategic Income Fund outstanding
was 159,014.119 and 13,836,031.713, respectively.
As of the record date, Merrill Lynch Pierce Fenner and Smith of New
Brunswick, NJ, broker-dealers, held of record 8.0% and 34.2% of the outstanding
shares of EV Classic Strategic Income Fund and EV Marathon Strategic Income
Fund, respectively, which it held on behalf of its customers who are the
beneficial owners of such shares. Such firm has informed the Trust that none of
its customers beneficially owned more than 5% of either Fund's outstanding
shares. River Distributing Co. Inc., Eagle Bay, NY 13331 held of the record date
73.73% of the outstanding shares of EV Classic Strategic Income Fund, and
Sun Air, c/o 420 Lexington Avenue, New York, NY 10170 held 6.25% of the
outstanding shares of EV Marathon Strategic Income Fund. To the knowledge of the
Trust, no other person owns (of record or beneficially) more than 5% of either
Fund's outstanding shares.
The Trustees know of no matter other than those mentioned in Proposals
1 through 3 of the Notice which will be presented at the meeting. If any other
matter is properly presented at the meeting, it is the intention of the persons
named as attorneys in the enclosed proxy to vote the proxies in accordance with
their judgment in regard to such matter. Proposals 1 and 2 would be implemented
March 1, 1997 if approval is obtained February 26, 1997.
PROPOSAL 1. TO APPROVE A MODIFIED INVESTMENT OBJECTIVE
At a meeting of Trustees held November 18, 1996, the Board voted to
modify the investment objective of the Funds. Each Fund's current investment
objective is "a high level of income by investing in a global portfolio
consisting primarily of high grade debt securities and having a dollar weighted
average maturity of not more than three years." The proposed objective would be
"a high level of income and total return by investing in a global portfolio
consisting primarily of high grade debt securities." No adjustment in current
portfolio holdings is contemplated if the change were implemented.
THE PROPOSED CHANGE WOULD NOT AFFECT THE TYPES OF SECURITIES THAT WOULD
BE PURCHASED AND WOULD NOT CHANGE THE CREDIT QUALITY OF THOSE SECURITIES. The
change would increase portfolio management flexibility by allowing the Strategic
Income Portfolio (the "SI Portfolio") in which the Funds invest to purchase debt
securities with a longer maturity and greater capital appreciation potential. Of
course, there is no assurance SI Portfolio's investment adviser, Boston
Management and Research ("BMR" or "Adviser"), will be able to use effectively
this increased flexibility and investors in the Funds may realize a decline in
the net asset value of their holdings. Longer maturity securities have greater
market value fluctuation, and if sold prior to maturity have greater potential
for loss as well as for gain.
The modification of each Fund's objective may also permit the Funds to
be more effectively marketed, which could result in certain economies of scale
if assets grow. Currently, the Funds have an investment objective that is
appealing to investors seeking income from a somewhat limited pool of
securities. With a broader objective, the Funds may be attractive to a greater
number of investors. If the change does facilitate greater sales, the Funds may
grow in net assets. Economies of scale could be achieved by spreading fixed
costs over a larger asset base. A broader selection of investments could then be
purchased, which may reduce risk and improve performance. Of course, the change
might not result in more effective marketing and an increase in net assets.
Indeed, net assets could decline. Overall compensation to the Adviser increases
as Fund assets grow.
Each Fund invests its assets in a corresponding investment company, SI
Portfolio, which has the same investment objective as the Funds. Each Fund will
vote its interest in SI Portfolio for or against a parallel proposal to amend
the Portfolio's investment objective proportionately to the instructions to vote
for or against the Funds' Proposal. A sufficient number of votes in favor of the
Proposal must be received in the aggregate from the Funds for each Fund's and SI
Portfolio's objective to be changed.
THE TRUSTEES OF THE TRUST RECOMMEND THAT THE SHAREHOLDERS OF THE FUNDS
VOTE TO MODIFY THE INVESTMENT OBJECTIVE. If approved by the Funds and SI
Portfolio, this Proposal will be effective upon filing supplements to the Funds'
prospectuses, or new prospectuses, with the Securities and Exchange Commission.
PROPOSAL 2. TO APPROVE A NEW INVESTMENT POLICY
TO PERMIT A REVISED INVESTMENT STRUCTURE
SUMMARY
The Board of Trustees of the Trust has approved, and is submitting to
the shareholders of each Fund for approval, the adoption of a new investment
policy for each Fund and the revision of a fundamental investment provision to
permit each Fund to invest part of its "investable assets" (portfolio securities
and cash) in one or more open-end management investment companies, including
High Income Portfolio (the "HI Portfolio"), having the same investment adviser
as Strategic Income Portfolio (the "SI Portfolio") in which the Funds currently
invest all of their investable assets. If this Proposal is approved, each Fund
intends to invest up to 35% of its assets in the HI Portfolio from time to time,
depending upon market conditions. This proposed investment structure is
permitted under the National Securities Markets Improvement Act of 1996, which
was enacted October 11, 1996.
The advantages of the Proposal to each Fund's shareholders is a
substantial increase in the diversification of high yield debt securities and a
more efficient means of investing in these securities. As of December 31, 1996,
SI Portfolio had 7 holdings of such securities and HI Portfolio had 143
holdings. Participation in a more diversified pool of high yield securities
should reduce the risk to shareholders. Moreover, the HI Portfolio currently has
lower operating expenses.
CURRENT INVESTMENT POLICY
Each Fund currently invests all of its investable assets in the SI
Portfolio. The SI Portfolio is a New York trust which, like the Trust, is
registered as an open-end management company under the Investment Company Act of
1940 (the "Act"). The SI Portfolio has substantially the same investment
objective, policies and restrictions as the Funds and BMR is the investment
adviser of the Portfolio. Thus, each Fund seeks to achieve its investment
objective through investment in the Portfolio, rather than through direct
investments in securities. The Portfolio in turn invests in securities and may
invest up to 35% of its assets in high yield debt securities (commonly referred
to as "junk bonds"). In the mutual fund industry, this two-tier structure is
commonly referred to as the "master-feeder" structure.
PROPOSED INVESTMENT POLICY
If this Proposal is approved, each Fund would have the ability to
invest up to 35% of its assets in HI Portfolio from time to time. Thus, a Fund
would be able to invest in both SI Portfolio (as currently), and in HI Portfolio
at the same time. Instead of SI Portfolio investing in high yield debt
securities, the Funds would invest part of their assets in HI Portfolio, which
consists of a portfolio of high yield debt securities managed by the same
company, BMR, that manages the SI Portfolio. Each Fund would invest in the
Portfolios in the same proportions. SI Portfolio could still hold some high
yield debt securities but the aggregate ownership interest in such securities of
a Fund held through investment in both Portfolios cannot exceed 35% of that
Fund's assets. To avoid possible disruption to the HI Portfolio, the Funds would
not make additional investments in HI Portfolio at any time that their aggregate
investment in HI Portfolio is 10% or more of the net assets of HI Portfolio,
unless the Trustees of the HI Portfolio permit that additional investment.
The new investment policy would permit the Funds to invest in other
registered investment companies in the Eaton Vance group of funds in addition to
or in lieu of HI Portfolio, if such other funds invest in securities that the
Funds can invest in and the Trustees of the Trust determine it is in the best
interests of the Funds to do so. There is no current intention to use this
authority.
INFORMATION ABOUT HI PORTFOLIO
The HI Portfolio, like SI Portfolio, is a New York trust which is
registered as an open-end management company under the Act. BMR is also the
investment adviser to HI Portfolio.
Investment Policies. The investment objective of the HI Portfolio is to
provide a high level of current income. HI Portfolio normally invests at least
65% of its assets in debt securities of the lowest investment grade, lower rated
obligations and unrated obligations; 80% of its net assets in fixed-income
securities, including convertible securities; and up to 20% of its net assets in
common stocks and other equity securities when consistent with its objective or
acquired as part of a unit combining fixed-income and equity securities. The
Funds will not invest in the HI Portfolio when such Portfolio is not so
invested. Foreign investments of HI Portfolio may not exceed 25% of total
assets. HI Portfolio may purchase and sell derivative instruments similar
to those SI Portfolio can purchase, except HI Portfolio cannot engage in swaps.
At December 31, 1996, HI Portfolio had 92.7% of its net assets invested in high
yield, high risk bonds, and no bonds were in default.
HI Portfolio has substantially the same fundamental and nonfundamental
policies as the Funds and the SI Portfolio, except that HI Portfolio is a
diversified investment company and, therefore, has the following additional
fundamental policy: With respect to 75% of total assets of the HI Portfolio, it
may not purchase any security if such purchase, at the time thereof, would cause
more than 5% of its total assets to be invested in the securities of a single
issuer, or cause more than 10% of the total outstanding voting securities of
such issuer to be held by it, except obligations issued or guaranteed by the
U.S. Government, its agencies or instrumentalities and except securities of
other investment companies. Most investment policies of HI Portfolio can be
changed by its trustees without investor approval.
Because HI Portfolio predominately invests in the types of securities
that SI Portfolio currently purchases with respect to 35% of SI Portfolio's
assets, investment risk to Fund shareholders should not increase. SI Portfolio
acquires debt securities rated below BBB-/Baa3 by Standard & Poor's Rating
Group, Moody's Investors Service, Inc. or Duff & Phelps, Inc., or, if unrated,
of equivalent quality (commonly referred to as "junk bonds"). Lower-rated
securities generally offer higher current yields and appreciation potential than
do higher-rated securities, but are subject to greater risks. Securities in the
lower-rated categories are considered to be of poor standing and predominantly
speculative; securities in the lowest rating categories may be in default and
are generally regarded by the rating agencies as having extremely poor prospects
of ever attaining any real investment standing. Lower quality debt securities
are subject to the risk of an issuer's inability to meet principal and interest
payments on the obligations (credit risk) and may also be subject to price
volatility due to such factors as interest rate sensitivity, market perception
of the creditworthiness of the issuer and general market liquidity (market
risk). Lower-rated and comparable unrated securities are also more likely to
react to real or perceived developments affecting market and credit risk than
are more highly rated securities, which react primarily to movements in the
general level of interest rates. HI Portfolio may invest a substantial portion
of its assets in such securities issued in connection with mergers,
acquisitions, leveraged buy-outs, recapitalizations and other highly leveraged
transactions which pose a higher risk of default or bankruptcy of the issuer
than other fixed-income securities particularly during periods of deteriorating
economic conditions and contraction in the credit markets. HI Portfolio may also
invest in debt securities not paying current income in anticipation of possible
future income or capital appreciation. The issuer of such securities may be in
bankruptcy or undergoing a debt restructuring or reorganization. Defaulted
securities may be retained, and may result in additional expense for HI
Portfolio to recover its investment.
While BMR is the investment adviser of both SI Portfolio and HI
Portfolio, the Portfolios have different portfolio managers. Mark S. Venezia has
acted as the portfolio manager of the SI Portfolio since it commenced
operations. He has been a Vice President of Eaton Vance Management since 1987
and of BMR since 1992. Hooker Talcott, Jr. has acted as portfolio manager of HI
Portfolio since it commenced operations. Mr. Talcott has been a Vice President
of Eaton Vance Management since 1987 and of BMR since 1992. Michael Weilheimer
is the co-portfolio manager of HI Portfolio and has been a Vice President of
Eaton Vance Management since 1992.
A copy of the prospectus of EV Marathon High Income Fund, a mutual fund
that has investment policies substantially identical to HI Portfolio, can be
obtained by calling Eaton Vance Distributors, Inc. at 1-800-225-6265.
Expenses. Under its advisory agreements with the Portfolios, BMR receives a
monthly advisory fee equal to the aggregate of
(a) a daily asset based fee computed by applying the annual asset
rate applicable to that portion of the total daily net assets
in each Category as indicated below, plus
(b) a daily income based fee computed by applying the daily income
rate applicable to that portion of the total daily gross
income (which portion shall bear the same relationship to the
total daily gross income on such day as that portion of the
total daily net assets in the same Category bears to the total
daily net assets on such day) in each Category as indicated
below:
SI PORTFOLIO HI PORTFOLIO
------------ ------------
ANNUAL DAILY ANNUAL DAILY
CATEGORY DAILY NET ASSETS ASSET INCOME ASSET INCOME
RATE RATE RATE RATE
- -------- -------------------------- ------ ------ -------- -------
1 up to $500 million 0.275% 2.75% 0.300% 3.00%
2 $500 million but less than 0.250% 2.50% 0.275% 2.75%
$1 billion
3 $1 billion but less than 0.225% 2.25% 0.250% 2.50%
$1.5 billion
4 $1.5 billion but less than 0.200% 2.00% 0.225% 2.25%
$2 billion
5 $2 billion but less than 0.175% 1.75% 0.200% 2.00%
$3 billion
6 $3 billion and over 0.150% 1.50% 0.175% 1.75%
All other provisions of the respective investment advisory agreements are
substantially the same. For the fiscal year ended October 31, 1996, SI
Portfolio's fee rate was 0.54% of average daily net assets and for the fiscal
year ended March 31, 1996, the HI Portfolio's fee rate was 0.63% of average
daily net assets.
Each Portfolio also engages BMR as its administrator. SI Portfolio pays
a monthly fee at an annual rate of .15% of average daily net assets. HI
Portfolio currently pays no administration fee, but may do so in the future.
Total expenses of the Portfolios, which the Funds bear indirectly, are
comprised of advisory and administration fees and certain other expenses such as
Trustees fees, custody fees, cost of pricing services, insurance premiums and
audit fees. These expenses generally decline as a percentage of net assets as a
Portfolio grows in size. As of December 31, 1996, the net assets of SI Portfolio
and HI Portfolio were approximately $135 million and $640 million, respectively.
The following table shows the estimated expenses for the Funds for the
twelve months ended December 31, 1996 (based on actual expenses for the year
ended October 31, 1996 for SI Portfolio and for the year ended March 31, 1996
for HI Portfolio) when the Funds invested all of their assets in SI Portfolio
and a pro forma adjustment (including the cost of this proxy solicitation) based
on the assumption each Fund had invested 80% of its assets in SI Portfolio and
20% of its assets in HI Portfolio (such 20% investment in HI Portfolio being the
maximum currently contemplated).
PRO FORMA EXPENSE COMPARISON
MARATHON STRATEGIC CLASSIC STRATEGIC
INCOME FUND INCOME FUND
------------------ -----------------
80% SIP 80% SIP
Fees 100% SIP 20% HIP 100% SIP 20% HIP
- ---- -------- ------- -------- -------
Advisory 0.54% 0.56% 0.54% 0.56%
Administration 0.15 0.12 0.15 0.12
12b-1 (Distribution) 0.92 0.92 1.00 1.00
Other 0.56 0.55 0.69 0.68
---- ---- ---- ----
2.17% 2.15% 2.38% 2.36%
PROPOSED SUPPLEMENT TO INVESTMENT RESTRICTIONS
The Board of Trustees of the Trust has approved, subject to a
shareholder vote, a supplemental provision to be added to the investment
restrictions of each Fund to permit each Fund to invest part of its investable
assets in the HI Portfolio and in certain other funds.
The Board of Trustees proposes that these restrictions and all other
investment restrictions be supplemented with a revised fundamental investment
provision as follows (with additions in italics and deletions in brackets):
"Notwithstanding the investment policies and restrictions of the Fund, the Fund
may invest [all of] its investable assets in an open-end management investment
company (a Portfolio) with substantially the same investment objective, policies
and restrictions as the Fund; moreover, subject to Trustee approval the Fund may
invest its investable assets in other open-end management investment
companies in the same group of investment companies with the same investment
adviser as the Portfolio (or an affiliate) if, with respect to such assets, the
other companies' permitted investments are substantially the same as those of
the Fund."
OTHER INFORMATION
In order to avoid additional financial reporting costs arising from
investing in HI Portfolio, the Trustees of the Trust and SI Portfolio have
approved a change in the fiscal year end of the Funds and SI Portfolio from
October 31 to March 31 if necessary to avoid such costs and ensure compliance
with accounting rules. If this change is implemented, shareholders will receive
shareholder reports in May and November instead of June and December.
The initial withdrawal of assets from SI Portfolio and investment in HI
Portfolio is not expected to result in transaction costs to be borne by SI
Portfolio. Movement of Fund assets from SI Portfolio to HI Portfolio and visa
versa is expected to be a gradual process. No capital gain recognition to Fund
shareholders is expected from this process.
The proposed transaction will not alter the rights and privileges of
shareholders of the Funds. The value of a shareholder's investment in a Fund
will be the same immediately after the Fund's investment in the HI Portfolio as
immediately before that investment. Of course, the value of a shareholder's
investment in a Fund will fluctuate thereafter.
Each Fund would be able to withdraw its investment in both Portfolios
at any time if the Trustees of the Trust determine that it is in the best
interests of a Fund to do so. Upon any such withdrawal, the Trustees would
consider what action might be taken, including the investment of the investable
assets of a Fund in another pooled investment entity having substantially the
same investment objective and policies as the Fund or the retention of an
investment adviser to manage the Fund's assets in accordance with its investment
policies.
Like the Funds, each Portfolio determines its net asset value once on
each day the New York Stock Exchange is open for trading, as of the close of
regular trading on the Exchange. Each Portfolio's net asset value is computed by
determining the value of the Portfolio's total assets (the securities it holds
plus any cash or other assets, including interest accrued but not yet received),
and subtracting all of the Portfolio's liabilities (including accrued expenses).
Both Portfolios value their assets in the same manner.
As partnerships under the Internal Revenue Code, the Portfolios do not
pay Federal income or excise taxes. Provided the Funds qualify as regulated
investment companies for Federal income tax purposes and the Portfolios are
treated as partnerships for Federal and Massachusetts tax purposes, no entity is
liable for income, corporate excise tax or franchise tax in Massachusetts.
Interests in a Portfolio have no pre-emptive or conversion rights, and
are fully paid and non-assessable, except as set forth below. A Portfolio
normally will not hold meetings of holders of such interests except as required
under the Act. A Portfolio would be required to hold a meeting of holders in the
event that at any time less than a majority of the trustees holding office had
been elected by holders. The trustees of a Portfolio continue to hold office
until their successors are elected and have qualified. Holders holding a
specified percentage interest in a Portfolio may call a meeting of holders in
the Portfolio for the purpose of removing any trustee. A trustee of a Portfolio
may be removed upon a majority vote of holders in the Portfolio qualified to
vote in the election. The Act requires a Portfolio to assist its holders in
calling such a meeting. Upon liquidation of a Portfolio, holders in the
Portfolio would be entitled to share pro rata in the net assets of the Portfolio
available for distribution to holders.
The approval of a Portfolio's investors (i.e., holders of interests in
the Portfolio, such as a Fund) is required to change any of its investment
restrictions; however, any change in nonfundamental investment policies would
not require such approval. Each holder in a Portfolio is entitled to a vote in
proportion to its share of the interests in the Portfolio. Except as described
below, whenever a Fund is requested to vote on matters pertaining to a
Portfolio, the Fund will hold a meeting of its shareholders and will cast its
votes proportionately as instructed by Fund shareholders. Because the Funds are
expected to hold only a minority interest in HI Portfolio, other investors in
that Portfolio will control matters submitted to a vote.
Subject to applicable statutory and regulatory requirements, a Fund
would not request a vote of its shareholders with respect to (a) any proposal
relating to a Portfolio, which proposal, if made with respect to the Fund, would
not require the vote of the shareholders of the Fund, or (b) any proposal, with
respect to the Portfolio that is identical, in all material respects, to a
proposal that has previously been approved by shareholders of the Fund. Any
proposal submitted to holders in a Portfolio, and that is not required to be
voted on by shareholders of a Fund, would nonetheless be voted on by the
Trustees of the Trust.
Investments in a Portfolio may not be transferred, but a holder may
withdraw all or any portion of its investment at any time at net asset value.
Each holder in a Portfolio, including a Fund, will be liable for all obligations
of the Portfolio. However, the risk of a holder in a Portfolio incurring
financial loss on account of such liability is limited to circumstances in which
both inadequate insurance exists and the Portfolio itself is unable to meet its
obligations. Thus, shareholders of a Fund should not experience losses from the
new investment structure itself.
Each Portfolio has its own board of trustees, including a majority of
trustees who are not "interested" persons of the Portfolio as defined in the
Act. The present noninterested trustees of HI Portfolio are identical to the
present noninterested Trustees of the Trust and of SI Portfolio.
EVALUATION BY THE TRUSTEES
The Board of Trustees of the Trust has carefully considered Proposal 2
and its potential benefits and risks. By adopting the proposed structure each
Fund can participate in a larger, more diversified and potentially more
attractive investment portfolio. Given the relative sizes of the SI Portfolio
and the HI Portfolio, the total expenses of each Fund will also be slightly
lower (assuming no change in either Portfolio's operations).
The Board believes that investing part of a Fund's assets in HI
Portfolio involves substantially the same risks as are associated with a Fund's
investment in SI Portfolio given the kinds of securities eligible for
investment.
Based on their consideration, analysis and evaluation of the above
factors and other information deemed by them to be relevant to this Proposal,
the Trustees (including the Independent Trustees) have concluded that it would
be in the best interests of each Fund and its shareholders to approve a new
investment policy and supplement to the Fund's investment restrictions to enable
the Fund to invest a substantial part of its investable assets in the HI
Portfolio.
VOTE REQUIRED TO APPROVE PROPOSAL 2
Approval by the shareholders of a Fund of the new investment policy and
revision to its fundamental investment restrictions require the affirmative vote
of a majority of the outstanding shares of the Fund which term as used in this
Proxy Statement means the vote of the lesser of (a) more than 50% of the
outstanding shares of the Fund, or (b) 67% of the shares of the Fund present at
the meeting if the holders of more than 50% of the outstanding shares of the
Fund are present or represented by proxy at the meeting.
THE TRUSTEES OF THE TRUST RECOMMEND THAT THE SHAREHOLDERS OF THE FUNDS
VOTE TO APPROVE THIS PROPOSAL. Implementation of this Proposal is not dependent
upon approval of any other Proposal in this Proxy Statement. In the event the
shareholders of a Fund fail to approve this Proposal, that Fund would continue
to invest all of its assets in SI Portfolio.
PROPOSAL 3. TO RATIFY THE SELECTION OF
COOPERS & LYBRAND L.L.P. AS THE INDEPENDENT ACCOUNTANTS OF THE FUNDS
A majority of the Trustees of the Trust who are not interested persons
of the Trust or EVM have selected Coopers & Lybrand L.L.P., One Post Office
Square, Boston, MA 02109 as independent accountants to sign or certify any
financial statements which may be filed by each Fund with the Securities and
Exchange Commission in respect of all or any part of the current fiscal year,
the employment of such accountants being expressly conditioned upon the right of
each Fund, by the vote of a majority of its outstanding "voting securities" (as
defined in the Act) at any meeting called for the purpose, to terminate such
employment forthwith without any penalty. (The current fiscal year ends October
31, 1997, unless Proposal 2 is implemented in which case the year end may be
changed to March 31, 1997.) Such selection was made pursuant to provisions of
Section 32(a) of the Act, and is subject to ratification or rejection by the
holders of shares of each Fund at the meeting of such holders. Coopers & Lybrand
L.L.P., currently serves as the independent accountants of each Fund. The Trust
is informed that no member of Coopers & Lybrand L.L.P. has any direct or
material indirect interest in either Fund or either Portfolio.
The Funds' independent accountants provide customary professional
services in connection with the audit function for a management investment
company series such as the Funds, and their fees for such services include fees
for work leading to the expression of opinions of the financial statements
included in annual reports to shareholders, opinions on financial statements and
other data included in each Fund's annual report to the Securities and Exchange
Commission, opinions on financial statements included in amendments to the
Trust's registration statement with respect to the Funds, and preparation of the
Funds' federal and state income tax returns. The nature and scope of the
professional services of the accountants have been approved by the Trust's
Trustees, which have considered the possible effect thereof on the independence
of the accountants.
Representatives of Coopers & Lybrand L.L.P. are not expected to be
present at the meeting but have been given the opportunity to make a statement
if they do so desire and will be available should any matter arise requiring
their presence.
It is intended that proxies not limited to the contrary will be voted
in favor of ratifying the selection of Coopers & Lybrand L.L.P., as the
independent accountants of each Fund to sign or certify financial statements
required to be signed or certified by independent accountants and filed with the
Securities and Exchange Commission in respect of all or part of the current
fiscal year of the Funds.
THE TRUSTEES OF THE TRUST RECOMMEND THAT THE SHAREHOLDERS OF EACH FUND
VOTE TO RATIFY THE SELECTION OF COOPERS & LYBRAND L.L.P. AS THE INDEPENDENT
ACCOUNTANTS OF THEIR FUND AT THE SHAREHOLDER MEETING. Shareholders of each Fund
vote separately on this proposal.
CERTAIN INFORMATION REGARDING THE
EATON VANCE ORGANIZATION
Boston Management and Research ("BMR"), or its parent Eaton Vance
Management ("EVM"), act as investment adviser to investment companies and
various individual and institutional clients, with combined assets under
management of over $16 billion. EVM provides administrative and management
services to certain Eaton Vance funds (including the Trust), as well as The
Wright Managed Income Trust, The Wright Managed Equity Trust, The Wright
EquiFund Equity Trust and The Wright Managed Blue Chip Series Trust.
There are no financial conditions known by the Eaton Vance organization
which would impair the financial ability of BMR to fulfill its commitment to the
Portfolios under its contractual agreements. BMR and EVM are Massachusetts
business trusts, and Eaton Vance, Inc. ("EV") is the trustee of BMR and EVM. The
Directors of EV are Landon T. Clay, M. Dozier Gardner, James B. Hawkes and
Benjamin A. Rowland , Jr. The Directors of Eaton Vance Corp. ("EVC"), which
wholly-owns EVM and EV, consist of the same persons and John G.L. Cabot and
Ralph Z. Sorenson. Mr. Clay is Chairman, Mr. Gardner is Vice Chairman and Mr.
Hawkes is President and Chief Executive Officer of EVC, EVM, BMR and EV. All
shares of the outstanding Voting Common Stock of EVC are deposited in a Voting
Trust which expires on December 31, 1997, the Voting Trustees of which are
Messrs. Clay, Gardner, Hawkes, and Rowland, and Thomas E. Faust. The Voting
Trustees have unrestricted voting rights for the election of Directors of EVC.
All of the outstanding voting trust receipts issued under said Voting Trust are
owned by certain of the officers of BMR and EVM. As of January 1, 1997, Messrs.
Clay, Gardner and Hawkes each owned 24% of such voting trust receipts, and
Messrs. Rowland and Faust owned 15% and 13%, respectively. The address of EVC,
EVM, BMR, EV and of its Directors or Trustees is 24 Federal Street, Boston,
Massachusetts 02110.
EVC owns all the stock of Energex Energy Corp., which is engaged in oil
and gas, exploration and development. EVM owns all the stock of Northeast
Properties, Inc., which is engaged in real estate investment. EVC owns all the
stock of Fulcrum Management, Inc. and MinVen, Inc., which are engaged in
precious metal mining venture investment and management. EVC also owns 24% of
the Class A shares of Lloyd George Management (BVI) Limited, a registered
investment adviser. EVC, BMR, EVM and EV may also enter into other businesses.
Certain Trustees of the Trust and the Portfolio, and most of their
respective officers are officers of BMR and EVM.
Eaton Vance Distributors, Inc. ("EVD") (a wholly-owned subsidiary of
EVM), 24 Federal Street, Boston, MA 02110 acts as Principal Underwriter for over
140 investment companies, each of which makes a continuous offering of shares.
EVD also acts as the Placement Agent for each Portfolio. The Placement Agent
Agreement is renewable annually by each Portfolio's Board of Trustees (including
a majority of the Independent Trustees), may be terminated on sixty days' notice
either by such Trustees or by vote of a majority of the outstanding voting
securities of the Portfolio or on six months notice by the Placement Agent and
is automatically terminated upon assignment.
NOTICE TO BANKS AND BROKER/DEALERS
The Trust has previously solicited all Nominee and Broker/Dealer
accounts as to the number of additional proxy statements required to supply
owners of shares. Should additional proxy material be required for beneficial
owners, please forward such requests to: First Data Investors Services Group,
Attention: Eaton Vance Funds, P.O. Box 5123, Westborough, MA 01581-5123.
ADDITIONAL INFORMATION
The expense of preparing, printing and mailing this Proxy Statement and
enclosures and the cost of soliciting proxies on behalf of the Board of Trustees
of the Trust will be borne by the Funds. Proxies will be solicited by mail and
may be solicited in person or by telephone or telegraph by officers of the
Trust, by personnel of its Administrator, Eaton Vance Management, by
broker-dealers or by Management Information Services Corp., 61 Accord Park
Drive, Norwell, MA 02061, a professional solicitation organization. The expenses
connected with the solicitation of these proxies and with any further proxies
which may be solicited will be borne by the Funds. The Funds will reimburse
banks, broker-dealer firms, and other persons holding shares registered in their
names or in the names of their nominees, for their expenses incurred in sending
proxy material to and obtaining proxies from the beneficial owners of such
shares.
All proxy cards solicited by the Board of Trustees that are properly
executed and received by the Secretary prior to the meeting, and which are not
revoked, will be voted at the meeting. Shares represented by such proxies will
be voted in accordance with the instructions thereon. If no specification is
made on the proxy card, it will be voted for the matters specified on the proxy
card. All proxies not voted will not be counted toward establishing a quorum.
Broker non-votes will be counted toward establishing a quorum and for
determining whether sufficient votes have been received for approval of the
Proposal to be acted upon. Shareholders should note that while votes to abstain
will count toward establishing a quorum, passage of any Proposal being
considered at the meeting will occur only if a sufficient number of votes are
cast for the Proposal. Accordingly, votes to abstain, broker non-votes and votes
against will have the same effect in determining whether a Proposal is approved.
In the event that sufficient votes by the shareholders of the Funds in
favor of any Proposal set forth in the Notice of this meeting are not received
by February 26, 1997, the persons named as attorneys in the enclosed proxy may
propose one or more adjournments of the meeting to permit further solicitation
of proxies. A shareholder vote may be taken on one or more of the Proposals in
this Proxy Statement prior to such adjournment if sufficient votes have been
received and it is otherwise appropriate. Any such adjournment will require the
affirmative vote of the holders of a majority of the shares present in person or
by proxy at the session of the meeting to be adjourned. The persons named as
attorneys in the enclosed proxy will vote in favor of such adjournment those
proxies which they are entitled to vote in favor of the Proposal for which
further solicitation of proxies is to be made. They will vote against any such
adjournment those proxies required to be voted against such Proposal. The costs
of any such additional solicitation and of any adjourned session will be borne
by the Funds.
Submission of Shareholder Proposals. The Trust and the Funds do not
hold annual shareholders' meetings. Shareholder wishing to submit proposals for
inclusion in a proxy statement for a subsequent shareholders' meeting should
send their written proposals to: Secretary, Eaton Vance Mutual Funds Trust, 24
Federal Street, Boston, Massachusetts 02110. Proposals must be received in
advance of a proxy solicitation to be included and the mere submission of a
proposal does not guarantee inclusion in the proxy statement because certain
federal securities law rules must be complied with.
A copy of a Fund's annual report to shareholders may be obtained
without charge by contacting the Fund at 24 Federal Street, Boston, MA 02110
(800-225-6265).
January 21, 1997
EV CLASSIC STRATEGIC INCOME FUND THIS PROXY IS SOLICITED ON BEHALF OF
PROXY THE BOARD OF TRUSTEES OF THE TRUST
KNOW ALL MEN BY THESE PRESENTS: That the undersigned, revoking previous proxies
for such stock, hereby appoints Alan R. Dynner, M. Dozier Gardner and Eric G.
Woodbury, or any of them, attorneys of the undersigned, with full power of
substitution, to vote all shares of EV Classic Strategic Income Fund, which the
undersigned is entitled to vote at the Special Meeting of the Shareholders of
said Fund to be held on February 26, 1997, at the principal office of the Fund,
24 Federal Street, Boston, Massachusetts 02110, at 10:00 A.M. (Boston time), and
at any and all adjournments thereof. Receipt of the Notice of and Proxy
Statement for said Meeting is acknowledged.
The shares represented by this proxy will be voted on the following matters as
specified below. If no specification is made, this proxy will be voted in favor
of all such matters. Note: This proxy must be returned in order for your shares
to be voted.
FOR AGAINST ABSTAIN 1
1. To consider and act upon a proposal to modify
the investment objective of the Fund.
FOR AGAINST ABSTAIN 2
2. To consider and act upon a proposal to permit a revised
investment structure wherein the Fund could invest its
assets in one or more investment companies with consistent, but
somewhat different, investment policies than the Fund.
FOR AGAINST ABSTAIN 3
3. To ratify the selection of Coopers & Lybrand L.L.P.as the
independent accountants of the Fund.
FOR AGAINST ABSTAIN 4
4. To consider and act upon any matters incidental to the foregoing
purposes or any of them, and any other matters which may properly
come before said meeting or an adjourned session thereof.
As to any matters, said attorneys shall vote in accordance with their judgment.
THE TRUSTEES RECOMMEND A VOTE IN FAVOR OF
ALL MATTERS
--------------------------------------------------------
--------------------------------------------------------
Please sign exactly as your name appears at left.
Dated: ___________________________________________, 1997
EV MARATHON STRATEGIC INCOME FUND THIS PROXY IS SOLICITED ON BEHALF OF
PROXY THE BOARD OF TRUSTEES OF THE TRUST
KNOW ALL MEN BY THESE PRESENTS: That the undersigned, revoking previous proxies
for such stock, hereby appoints Alan R. Dynner, M. Dozier Gardner and Eric G.
Woodbury, or any of them, attorneys of the undersigned, with full power of
substitution, to vote all shares of EV Marathon Strategic Income Fund, which the
undersigned is entitled to vote at the Special Meeting of the Shareholders of
said Fund to be held on February 26, 1997, at the principal office of the Fund,
24 Federal Street, Boston, Massachusetts 02110, at 10:00 A.M. (Boston time), and
at any and all adjournments thereof. Receipt of the Notice of and Proxy
Statement for said Meeting is acknowledged.
The shares represented by this proxy will be voted on the following matters as
specified below. If no specification is made, this proxy will be voted in favor
of all such matters. Note: This proxy must be returned in order for your shares
to be voted.
FOR AGAINST ABSTAIN 1
1. To consider and act upon a proposal to modify
the investment objective of the Fund.
FOR AGAINST ABSTAIN 2
2. To consider and act upon a proposal to permit a revised
investment structure wherein the Fund could invest its
assets in one ore more investment companies with
consistent, but somewhat different, investment policies
than the Fund.
FOR AGAINST ABSTAIN 3
3. To ratify the selection of Coopers & Lybrand L.L.P. as the
independent accountants of the Fund.
FOR AGAINST ABSTAIN 4
4. To consider and act upon any matters incidental to the foregoing
purposes or any of them, and any other matters which may properly
come before said meeting or an adjourned session thereof.
As to any matters, said attorneys shall vote in accordance with their judgment.
THE TRUSTEES RECOMMEND A VOTE IN FAVOR OF
ALL MATTERS
------------------------------------------------------
------------------------------------------------------
Please sign exactly as your name appears at left.
Dated: ___________________________________________, 1997