UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form N-Q
QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
811-21614
Investment Company Act File Number
Eaton Vance Enhanced Equity Income Fund
(Exact Name of Registrant as Specified in Charter)
Two International Place, Boston, Massachusetts 02110
(Address of Principal Executive Offices)
Maureen A. Gemma
Two International Place, Boston, Massachusetts 02110
(Name and Address of Agent for Services)
(617) 482-8260
(Registrants Telephone Number, Including Area Code)
September 30
Date of Fiscal Year End
December 31, 2015
Date of Reporting Period
Item 1. Schedule of Investments
Eaton Vance
Enhanced Equity Income Fund
December 31, 2015
PORTFOLIO OF INVESTMENTS (Unaudited)
Common Stocks 100.0%(1)
Security | Shares | Value | ||||||
Aerospace & Defense 2.0% |
||||||||
United Technologies Corp. |
112,107 | $ | 10,770,119 | |||||
|
|
|||||||
$ | 10,770,119 | |||||||
|
|
|||||||
Banks 3.9% |
||||||||
JPMorgan Chase & Co. |
217,415 | $ | 14,355,913 | |||||
PNC Financial Services Group, Inc. (The) |
73,285 | 6,984,793 | ||||||
|
|
|||||||
$ | 21,340,706 | |||||||
|
|
|||||||
Beverages 1.9% |
||||||||
Constellation Brands, Inc., Class A |
74,738 | $ | 10,645,681 | |||||
|
|
|||||||
$ | 10,645,681 | |||||||
|
|
|||||||
Biotechnology 1.8% |
||||||||
Celgene Corp.(2) |
83,617 | $ | 10,013,972 | |||||
|
|
|||||||
$ | 10,013,972 | |||||||
|
|
|||||||
Capital Markets 3.5% |
||||||||
Credit Suisse Group AG |
413,161 | $ | 8,900,299 | |||||
Credit Suisse Group AG(3) |
130,907 | 2,819,994 | ||||||
Goldman Sachs Group, Inc. (The) |
42,631 | 7,683,385 | ||||||
|
|
|||||||
$ | 19,403,678 | |||||||
|
|
|||||||
Chemicals 0.6% |
||||||||
PPG Industries, Inc. |
35,506 | $ | 3,508,703 | |||||
|
|
|||||||
$ | 3,508,703 | |||||||
|
|
|||||||
Consumer Finance 1.7% |
||||||||
Synchrony Financial(2) |
301,723 | $ | 9,175,396 | |||||
|
|
|||||||
$ | 9,175,396 | |||||||
|
|
|||||||
Diversified Telecommunication Services 3.3% |
||||||||
CenturyLink, Inc. |
215,640 | $ | 5,425,503 | |||||
Verizon Communications, Inc. |
154,497 | 7,140,851 | ||||||
Zayo Group Holdings, Inc.(2) |
196,039 | 5,212,677 | ||||||
|
|
|||||||
$ | 17,779,031 | |||||||
|
|
|||||||
Electric Utilities 1.8% |
||||||||
NextEra Energy, Inc. |
92,050 | $ | 9,563,075 | |||||
|
|
|||||||
$ | 9,563,075 | |||||||
|
|
|||||||
Electronic Equipment, Instruments & Components 2.4% |
||||||||
Corning, Inc. |
725,698 | $ | 13,265,759 | |||||
|
|
|||||||
$ | 13,265,759 | |||||||
|
|
|||||||
Energy Equipment & Services 1.0% |
||||||||
Schlumberger, Ltd. |
75,150 | $ | 5,241,713 | |||||
|
|
|||||||
$ | 5,241,713 | |||||||
|
|
|||||||
Food & Staples Retailing 1.9% |
||||||||
Kroger Co. (The) |
252,477 | $ | 10,561,113 | |||||
|
|
|||||||
$ | 10,561,113 | |||||||
|
|
1
Security | Shares | Value | ||||||
Food Products 3.9% |
||||||||
General Mills, Inc. |
191,707 | $ | 11,053,826 | |||||
Mondelez International, Inc., Class A |
223,723 | 10,031,739 | ||||||
|
|
|||||||
$ | 21,085,565 | |||||||
|
|
|||||||
Health Care Equipment & Supplies 1.7% |
||||||||
Medtronic PLC |
117,981 | $ | 9,075,099 | |||||
|
|
|||||||
$ | 9,075,099 | |||||||
|
|
|||||||
Household Durables 1.1% |
||||||||
Newell Rubbermaid, Inc. |
137,301 | $ | 6,052,228 | |||||
|
|
|||||||
$ | 6,052,228 | |||||||
|
|
|||||||
Industrial Conglomerates 6.0% |
||||||||
Danaher Corp. |
152,845 | $ | 14,196,244 | |||||
General Electric Co. |
590,924 | 18,407,282 | ||||||
|
|
|||||||
$ | 32,603,526 | |||||||
|
|
|||||||
Insurance 3.7% |
||||||||
Aflac, Inc. |
135,871 | $ | 8,138,673 | |||||
American Financial Group, Inc. |
58,388 | 4,208,607 | ||||||
XL Group PLC |
203,548 | 7,975,011 | ||||||
|
|
|||||||
$ | 20,322,291 | |||||||
|
|
|||||||
Internet & Catalog Retail 3.2% |
||||||||
Amazon.com, Inc.(2) |
25,954 | $ | 17,542,049 | |||||
|
|
|||||||
$ | 17,542,049 | |||||||
|
|
|||||||
Internet Software & Services 6.4% |
||||||||
Alphabet, Inc., Class C(2) |
31,221 | $ | 23,692,992 | |||||
Facebook, Inc., Class A(2) |
108,533 | 11,359,064 | ||||||
|
|
|||||||
$ | 35,052,056 | |||||||
|
|
|||||||
IT Services 3.2% |
||||||||
Visa, Inc., Class A |
223,656 | $ | 17,344,523 | |||||
|
|
|||||||
$ | 17,344,523 | |||||||
|
|
|||||||
Media 4.1% |
||||||||
Live Nation Entertainment, Inc.(2) |
264,176 | $ | 6,490,804 | |||||
Walt Disney Co. (The) |
153,067 | 16,084,281 | ||||||
|
|
|||||||
$ | 22,575,085 | |||||||
|
|
|||||||
Multi-Utilities 1.6% |
||||||||
Sempra Energy |
95,888 | $ | 9,014,431 | |||||
|
|
|||||||
$ | 9,014,431 | |||||||
|
|
|||||||
Multiline Retail 3.3% |
||||||||
Dollar General Corp. |
174,869 | $ | 12,567,835 | |||||
Target Corp. |
72,382 | 5,255,657 | ||||||
|
|
|||||||
$ | 17,823,492 | |||||||
|
|
|||||||
Oil, Gas & Consumable Fuels 5.3% |
||||||||
Chevron Corp. |
88,941 | $ | 8,001,132 | |||||
Devon Energy Corp. |
154,318 | 4,938,176 | ||||||
EOG Resources, Inc. |
50,857 | 3,600,167 | ||||||
Occidental Petroleum Corp. |
104,903 | 7,092,492 | ||||||
Royal Dutch Shell PLC, Class B |
234,605 | 5,346,864 | ||||||
|
|
|||||||
$ | 28,978,831 | |||||||
|
|
2
Security | Shares | Value | ||||||
Pharmaceuticals 11.2% |
||||||||
Allergan PLC(2) |
34,594 | $ | 10,810,625 | |||||
Bristol-Myers Squibb Co. |
114,615 | 7,884,366 | ||||||
Eli Lilly & Co. |
95,833 | 8,074,888 | ||||||
Johnson & Johnson |
151,791 | 15,591,971 | ||||||
Perrigo Co. PLC |
74,834 | 10,828,480 | ||||||
Teva Pharmaceutical Industries, Ltd. ADR |
127,801 | 8,388,858 | ||||||
|
|
|||||||
$ | 61,579,188 | |||||||
|
|
|||||||
Real Estate Investment Trusts (REITs) 2.8% |
||||||||
Equity Residential |
101,008 | $ | 8,241,243 | |||||
Federal Realty Investment Trust |
48,596 | 7,099,875 | ||||||
|
|
|||||||
$ | 15,341,118 | |||||||
|
|
|||||||
Semiconductors & Semiconductor Equipment 4.0% |
||||||||
Intel Corp. |
338,172 | $ | 11,650,025 | |||||
NXP Semiconductors NV(2) |
123,734 | 10,424,590 | ||||||
|
|
|||||||
$ | 22,074,615 | |||||||
|
|
|||||||
Software 4.6% |
||||||||
Microsoft Corp. |
134,854 | $ | 7,481,700 | |||||
Oracle Corp. |
324,423 | 11,851,172 | ||||||
Tableau Software, Inc., Class A(2) |
64,460 | 6,073,421 | ||||||
|
|
|||||||
$ | 25,406,293 | |||||||
|
|
|||||||
Technology Hardware, Storage & Peripherals 4.1% |
||||||||
Apple, Inc. |
213,982 | $ | 22,523,745 | |||||
|
|
|||||||
$ | 22,523,745 | |||||||
|
|
|||||||
Textiles, Apparel & Luxury Goods 2.3% |
||||||||
NIKE, Inc., Class B |
200,428 | $ | 12,526,750 | |||||
|
|
|||||||
$ | 12,526,750 | |||||||
|
|
|||||||
Tobacco 1.7% |
||||||||
Altria Group, Inc. |
159,570 | $ | 9,288,570 | |||||
|
|
|||||||
$ | 9,288,570 | |||||||
|
|
|||||||
Total Common Stocks |
$ | 547,478,401 | ||||||
|
|
|||||||
Short-Term Investments 0.3% |
||||||||
Description | Interest (000s omitted) |
Value | ||||||
Eaton Vance Cash Reserves Fund, LLC, 0.37%(4) |
$ | 1,654 | $ | 1,654,298 | ||||
|
|
|||||||
Total Short-Term Investments |
$ | 1,654,298 | ||||||
|
|
|||||||
Total Investments 100.3% |
$ | 549,132,699 | ||||||
|
|
3
Covered Call Options Written (0.3)% |
Security | Number of Contracts |
Strike Price |
Expiration Date |
Value | ||||||||||||
Aflac, Inc. |
680 | $ | 67.50 | 1/15/16 | $ | (2,040 | ) | |||||||||
Allergan PLC |
170 | 322.50 | 1/29/16 | (59,500 | ) | |||||||||||
Alphabet, Inc., Class C |
155 | 800.00 | 1/29/16 | (200,725 | ) | |||||||||||
Altria Group, Inc. |
795 | 60.00 | 1/8/16 | (4,770 | ) | |||||||||||
Amazon.com, Inc. |
125 | 692.50 | 1/22/16 | (123,750 | ) | |||||||||||
Apple, Inc. |
1,065 | 123.00 | 1/8/16 | (1,597 | ) | |||||||||||
Bristol-Myers Squibb Co. |
570 | 71.50 | 1/8/16 | (4,845 | ) | |||||||||||
Celgene Corp. |
415 | 118.00 | 1/29/16 | (230,325 | ) | |||||||||||
CenturyLink, Inc. |
1,075 | 30.00 | 1/15/16 | (2,687 | ) | |||||||||||
Chevron Corp. |
440 | 95.00 | 1/22/16 | (29,920 | ) | |||||||||||
Constellation Brands, Inc., Class A |
370 | 150.00 | 1/15/16 | (24,050 | ) | |||||||||||
Corning, Inc. |
3,625 | 19.00 | 1/15/16 | (48,938 | ) | |||||||||||
Danaher Corp. |
760 | 97.50 | 2/19/16 | (55,100 | ) | |||||||||||
Devon Energy Corp. |
770 | 35.00 | 1/29/16 | (59,290 | ) | |||||||||||
Dollar General Corp. |
870 | 71.50 | 1/8/16 | (95,700 | ) | |||||||||||
Eli Lilly & Co. |
475 | 88.00 | 1/8/16 | (15,437 | ) | |||||||||||
EOG Resources, Inc. |
250 | 77.50 | 1/22/16 | (10,375 | ) | |||||||||||
Equity Residential |
505 | 85.00 | 2/19/16 | (47,975 | ) | |||||||||||
Facebook, Inc., Class A |
540 | 111.00 | 1/8/16 | (2,430 | ) | |||||||||||
General Electric Co. |
2,950 | 31.00 | 1/8/16 | (119,475 | ) | |||||||||||
General Mills, Inc. |
955 | 60.00 | 1/15/16 | (8,595 | ) | |||||||||||
Goldman Sachs Group, Inc. (The) |
210 | 187.50 | 1/22/16 | (30,135 | ) | |||||||||||
JPMorgan Chase & Co. |
1,215 | 67.50 | 1/15/16 | (54,068 | ) | |||||||||||
Kroger Co. (The) |
1,260 | 42.50 | 1/15/16 | (50,400 | ) | |||||||||||
Medtronic PLC |
585 | 79.00 | 1/29/16 | (32,760 | ) | |||||||||||
Microsoft Corp. |
670 | 57.50 | 1/8/16 | (3,685 | ) | |||||||||||
Mondelez International, Inc., Class A |
1,115 | 47.00 | 1/15/16 | (18,398 | ) | |||||||||||
NextEra Energy, Inc. |
460 | 105.00 | 1/15/16 | (40,250 | ) | |||||||||||
NIKE, Inc., Class B |
1,000 | 69.50 | 1/29/16 | (8,500 | ) | |||||||||||
NXP Semiconductors NV |
615 | 100.00 | 1/8/16 | (15,375 | ) | |||||||||||
Occidental Petroleum Corp. |
520 | 73.00 | 1/29/16 | (29,120 | ) | |||||||||||
Oracle Corp. |
1,215 | 41.00 | 1/8/16 | (3,037 | ) | |||||||||||
Perrigo Co. PLC |
370 | 160.00 | 1/22/16 | (46,250 | ) | |||||||||||
PNC Financial Services Group, Inc. (The) |
615 | 100.00 | 2/19/16 | (54,428 | ) | |||||||||||
PPG Industries, Inc. |
175 | 105.00 | 2/19/16 | (15,750 | ) | |||||||||||
Schlumberger, Ltd. |
375 | 74.00 | 1/29/16 | (27,375 | ) | |||||||||||
Sempra Energy |
475 | 100.00 | 2/19/16 | (24,938 | ) | |||||||||||
Synchrony Financial |
1,215 | 33.00 | 1/8/16 | (15,187 | ) | |||||||||||
Tableau Software, Inc., Class A |
320 | 98.00 | 1/22/16 | (53,600 | ) | |||||||||||
Teva Pharmaceutical Industries, Ltd. ADR |
635 | 69.00 | 1/22/16 | (12,700 | ) | |||||||||||
Verizon Communications, Inc. |
770 | 48.00 | 1/29/16 | (8,085 | ) | |||||||||||
Walt Disney Co. (The) |
765 | 112.00 | 1/29/16 | (34,808 | ) | |||||||||||
XL Group PLC |
1,015 | 42.00 | 2/19/16 | (21,315 | ) | |||||||||||
|
|
|||||||||||||||
Total Covered Call Options Written |
$ | (1,747,688 | ) | |||||||||||||
|
|
|||||||||||||||
Other Assets, Less Liabilities 0.0%(5) |
$ | 298,221 | ||||||||||||||
|
|
|||||||||||||||
Net Assets 100.0% |
|
$ | 547,683,232 | |||||||||||||
|
|
4
The percentage shown for each investment category in the Portfolio of Investments is based on net assets.
(1) | A portion of each applicable common stock for which a written call option is outstanding at December 31, 2015 has been pledged as collateral for such written option. |
(2) | Non-income producing security. |
(3) | Security was acquired in a private offering and may be resold on a designated offshore securities market pursuant to Regulation S under the Securities Act of 1933. |
(4) | Affiliated investment company, available to Eaton Vance portfolios and funds, which invests in high quality, U.S. dollar denominated money market instruments. The rate shown is the annualized seven-day yield as of December 31, 2015. Net income allocated from the investment in Eaton Vance Cash Reserves Fund, LLC for the fiscal year to date ended December 31, 2015 was $1,616. |
(5) | Amount is less than 0.05%. |
Abbreviations:
ADR |
- | American Depositary Receipt |
Written options activity for the fiscal year to date ended December 31, 2015 was as follows:
Number of Contracts |
Premiums Received |
|||||||
Outstanding, beginning of period | 39,470 | $ | 3,382,526 | |||||
Options written | 116,480 | 8,536,177 | ||||||
Options terminated in closing purchase transactions | (68,100 | ) | (5,204,951 | ) | ||||
Options expired | (54,695 | ) | (4,250,536 | ) | ||||
|
|
|
|
|||||
Outstanding, end of period | 33,155 | $ | 2,463,216 | |||||
|
|
|
|
At December 31, 2015, the Fund had sufficient cash and/or securities to cover commitments under open derivative contracts.
The Fund is subject to equity price risk in the normal course of pursuing its investment objectives. The Fund writes covered call options on individual stocks above the current value of the stock to generate premium income. In writing call options on individual stocks, the Fund in effect, sells potential appreciation in the value of the applicable stock above the exercise price in exchange for the option premium received. The Fund retains the risk of loss, minus the premium received, should the price of the underlying stock decline.
At December 31, 2015, the aggregate fair value of open derivative instruments (not considered to be hedging instruments for accounting disclosure purposes) in a liability position and whose primary underlying risk exposure is equity price risk was $1,747,688.
The cost and unrealized appreciation (depreciation) of investments of the Fund at December 31, 2015, as determined on a federal income tax basis, were as follows:
Aggregate cost |
$ | 480,436,553 | ||
|
|
|||
Gross unrealized appreciation |
$ | 85,754,616 | ||
Gross unrealized depreciation |
(17,058,470 | ) | ||
|
|
|||
Net unrealized appreciation |
$ | 68,696,146 | ||
|
|
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 funds 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.
5
At December 31, 2015, the hierarchy of inputs used in valuing the Funds investments and open derivative instruments, which are carried at value, were as follows:
Asset Description | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Common Stocks | ||||||||||||||||
Consumer Discretionary |
$ | 76,519,604 | $ | | $ | | $ | 76,519,604 | ||||||||
Consumer Staples |
51,580,929 | | | 51,580,929 | ||||||||||||
Energy |
28,873,680 | 5,346,864 | | 34,220,544 | ||||||||||||
Financials |
73,862,896 | 11,720,293 | | 85,583,189 | ||||||||||||
Health Care |
80,668,259 | | | 80,668,259 | ||||||||||||
Industrials |
43,373,645 | | | 43,373,645 | ||||||||||||
Information Technology |
135,666,991 | | | 135,666,991 | ||||||||||||
Materials |
3,508,703 | | | 3,508,703 | ||||||||||||
Telecommunication Services |
17,779,031 | | | 17,779,031 | ||||||||||||
Utilities |
18,577,506 | | | 18,577,506 | ||||||||||||
Total Common Stocks |
$ | 530,411,244 | $ | 17,067,157 | * | $ | | $ | 547,478,401 | |||||||
Short-Term Investments |
$ | | $ | 1,654,298 | $ | | $ | 1,654,298 | ||||||||
Total Investments |
$ | 530,411,244 | $ | 18,721,455 | $ | | $ | 549,132,699 | ||||||||
Liability Description | ||||||||||||||||
Covered Call Options Written |
$ | (1,747,688 | ) | $ | | $ | | $ | (1,747,688 | ) | ||||||
Total |
$ | (1,747,688 | ) | $ | | $ | | $ | (1,747,688 | ) |
* | Includes foreign equity securities whose values were adjusted to reflect market trading of comparable securities or other correlated instruments that occurred after the close of trading in their applicable foreign markets. |
The Fund held no investments or other financial instruments as of September 30, 2015 whose fair value was determined using Level 3 inputs. At December 31, 2015, there were no investments transferred between Level 1 and Level 2 during the fiscal year to date then ended.
For information on the Funds policy regarding the valuation of investments and other significant accounting policies, please refer to the Funds most recent financial statements included in its semiannual or annual report to shareholders.
6
Item 2. Controls and Procedures
(a) It is the conclusion of the registrants principal executive officer and principal financial officer that the effectiveness of the registrants 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 on this Form N-Q has been recorded, processed, summarized and reported within the time period specified in the Commissions rules and forms and that the information required to be disclosed by the registrant on this Form N-Q has been accumulated and communicated to the registrants principal executive officer and principal financial officer in order to allow timely decisions regarding required disclosure.
(b) There have been no changes in the registrants internal controls over financial reporting during the fiscal quarter for which the report is being filed that have materially affected, or are reasonably likely to materially affect the registrants internal control over financial reporting.
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 Enhanced Equity Income Fund
By: | /s/ Michael A. Allison | |
Michael A. Allison | ||
President | ||
Date: | February 22, 2016 |
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/ Michael A. Allison | |
Michael A. Allison | ||
President | ||
Date: | February 22, 2016 |
By: | /s/ James F. Kirchner | |
James F. Kirchner | ||
Treasurer | ||
Date: | February 22, 2016 |