Eaton Vance Tax-Managed Buy-Write Income Fund

 

 

 

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form N-Q

QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED

MANAGEMENT INVESTMENT COMPANIES

811-21676

Investment Company Act File Number

Eaton Vance Tax-Managed Buy-Write 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

(Registrant’s Telephone Number, Including Area Code)

December 31

Date of Fiscal Year End

March 31, 2014

Date of Reporting Period

 

 

 

Item 1. Schedule of Investments

Eaton Vance

Tax-Managed Buy-Write Income Fund

March 31, 2014

PORTFOLIO OF INVESTMENTS (Unaudited)

Common Stocks — 100.4%

 

                                                 
Security    Shares      Value  

Aerospace & Defense — 3.8%

      

Boeing Co. (The)

      26,422       $ 3,315,697   

Honeywell International, Inc.

      43,114         3,999,255   

Northrop Grumman Corp.

      21,600         2,665,008   

Textron, Inc.

      11,648         457,650   

United Technologies Corp.

      39,766         4,646,259   
     

 

 

  
      $ 15,083,869   
     

 

 

  

Air Freight & Logistics — 0.5%

      

C.H. Robinson Worldwide, Inc.

      5,324       $ 278,925   

United Parcel Service, Inc., Class B

      18,056         1,758,293   
     

 

 

  
      $ 2,037,218   
     

 

 

  

Airlines — 0.2%

      

Southwest Airlines Co.

      36,616       $ 864,504   
     

 

 

  
      $ 864,504   
     

 

 

  

Auto Components — 0.8%

      

Dana Holding Corp.

      31,658       $ 736,682   

Goodyear Tire & Rubber Co. (The)

      10,898         284,765   

Johnson Controls, Inc.

      36,367         1,720,886   

Lear Corp.

      7,250         606,970   
     

 

 

  
      $ 3,349,303   
     

 

 

  

Automobiles — 0.3%

      

Ford Motor Co.

      76,877       $ 1,199,281   
     

 

 

  
      $ 1,199,281   
     

 

 

  

Banks — 7.3%

      

Bank of America Corp.

      147,580       $ 2,538,376   

BankUnited, Inc.

      10,483         364,494   

BB&T Corp.

      9,579         384,789   

Citigroup, Inc.

      108,402         5,159,935   

Comerica, Inc.

      3,420         177,156   

Fifth Third Bancorp

      62,268         1,429,051   

JPMorgan Chase & Co.

      109,741         6,662,376   

KeyCorp

      85,122         1,212,137   

M&T Bank Corp.

      6,860         832,118   

PNC Financial Services Group, Inc. (The)

      22,704         1,975,248   

SunTrust Banks, Inc.

      5,538         220,357   

Wells Fargo & Co.

      161,845         8,050,170   
     

 

 

  
      $ 29,006,207   
     

 

 

  

Beverages — 2.3%

      

Coca-Cola Co. (The)

      138,646       $ 5,360,054   

PepsiCo, Inc.

      47,142         3,936,357   
     

 

 

  
      $ 9,296,411   
     

 

 

  

Biotechnology — 2.5%

      

Amgen, Inc.

      18,988       $ 2,341,980   

Biogen Idec, Inc.(1)

      3,000         917,610   

Celgene Corp.(1)

      23,673         3,304,751   

Gilead Sciences, Inc.(1)

      44,082         3,123,650   

Vertex Pharmaceuticals, Inc.(1)

      1,850         130,832   
     

 

 

  
      $ 9,818,823   
     

 

 

  

 

1

 

 

                                                 
Security    Shares      Value  

Capital Markets — 1.4%

      

Greenhill & Co., Inc.

      14,014       $ 728,448   

Invesco, Ltd.

      38,480         1,423,760   

Lazard, Ltd., Class A

      21,525         1,013,612   

Legg Mason, Inc.

      7,629         374,126   

State Street Corp.

      27,413         1,906,574   

Walter Investment Management Corp.(1)

      7,355         219,400   
     

 

 

  
      $ 5,665,920   
     

 

 

  

Chemicals — 2.1%

      

CF Industries Holdings, Inc.

      3,459       $ 901,554   

Dow Chemical Co. (The)

      45,132         2,192,964   

E.I. du Pont de Nemours & Co.

      46,387         3,112,568   

Eastman Chemical Co.

      3,608         311,045   

Sherwin-Williams Co. (The)

      9,183         1,810,245   
     

 

 

  
      $ 8,328,376   
     

 

 

  

Commercial Services & Supplies — 0.4%

      

Waste Management, Inc.

      37,595       $ 1,581,622   
     

 

 

  
      $ 1,581,622   
     

 

 

  

Communications Equipment — 2.6%

      

Brocade Communications Systems, Inc.(1)

      42,403       $ 449,896   

Cisco Systems, Inc.

      197,889         4,434,692   

QUALCOMM, Inc.

      69,800         5,504,428   
     

 

 

  
      $ 10,389,016   
     

 

 

  

Construction & Engineering — 0.5%

      

Fluor Corp.

      25,575       $ 1,987,945   
     

 

 

  
      $ 1,987,945   
     

 

 

  

Consumer Finance — 1.2%

      

American Express Co.

      27,933       $ 2,514,808   

Discover Financial Services

      40,754         2,371,475   
     

 

 

  
      $ 4,886,283   
     

 

 

  

Containers & Packaging — 0.4%

      

Avery Dennison Corp.

      15,307       $ 775,606   

MeadWestvaco Corp.

      21,446         807,227   
     

 

 

  
      $ 1,582,833   
     

 

 

  

Distributors — 0.6%

      

Genuine Parts Co.

      27,494       $ 2,387,854   
     

 

 

  
      $ 2,387,854   
     

 

 

  

Diversified Financial Services — 1.6%

      

Berkshire Hathaway, Inc., Class B(1)

      28,223       $ 3,527,028   

McGraw Hill Financial, Inc.

      35,026         2,672,484   
     

 

 

  
      $ 6,199,512   
     

 

 

  

Diversified Telecommunication Services — 2.1%

      

AT&T, Inc.

      151,222       $ 5,303,356   

Frontier Communications Corp.

      67,026         382,048   

Verizon Communications, Inc.

      52,772         2,510,364   

Windstream Holdings, Inc.

      28,197         232,343   
     

 

 

  
      $ 8,428,111   
     

 

 

  

Electric Utilities — 1.0%

      

Duke Energy Corp.

      26,841       $ 1,911,616   

Edison International

      21,133         1,196,339   

 

2

 

 

                                                 
Security    Shares      Value  

Pinnacle West Capital Corp.

      7,168       $ 391,803   

Xcel Energy, Inc.

      12,009         364,593   
     

 

 

  
      $ 3,864,351   
     

 

 

  

Electrical Equipment — 0.8%

      

Emerson Electric Co.

      49,204       $ 3,286,827   
     

 

 

  
      $ 3,286,827   
     

 

 

  

Energy Equipment & Services — 2.1%

      

Halliburton Co.

      58,423       $ 3,440,530   

Schlumberger, Ltd.

      51,953         5,065,418   
     

 

 

  
      $ 8,505,948   
     

 

 

  

Food & Staples Retailing — 1.9%

      

CVS Caremark Corp.

      59,799       $ 4,476,553   

Wal-Mart Stores, Inc.

      40,512         3,096,332   
     

 

 

  
      $ 7,572,885   
     

 

 

  

Food Products — 1.7%

      

Kellogg Co.

      16,937       $ 1,062,119   

Keurig Green Mountain, Inc.

      15,366         1,622,496   

Kraft Foods Group, Inc.

      18,114         1,016,196   

Mondelez International, Inc., Class A

      54,344         1,877,585   

Tyson Foods, Inc., Class A

      28,696         1,262,911   
     

 

 

  
      $ 6,841,307   
     

 

 

  

Health Care Equipment & Supplies — 3.0%

      

Abbott Laboratories

      73,588       $ 2,833,874   

Baxter International, Inc.

      41,401         3,046,286   

Covidien PLC

      11,380         838,251   

Medtronic, Inc.

      41,406         2,548,125   

Stryker Corp.

      27,992         2,280,508   

Zimmer Holdings, Inc.

      5,294         500,706   
     

 

 

  
      $ 12,047,750   
     

 

 

  

Health Care Providers & Services — 1.5%

      

DaVita HealthCare Partners, Inc.(1)

      5,790       $ 398,641   

Express Scripts Holding Co.(1)

      8,616         646,975   

HCA Holdings, Inc.(1)

      8,034         421,785   

UnitedHealth Group, Inc.

      49,739         4,078,101   

VCA Antech, Inc.(1)

      11,050         356,142   
     

 

 

  
      $ 5,901,644   
     

 

 

  

Hotels, Restaurants & Leisure — 1.4%

      

Marriott International, Inc., Class A

      20,645       $ 1,156,533   

Marriott Vacations Worldwide Corp.(1)

      2,064         115,398   

McDonald’s Corp.

      35,843         3,513,689   

Wyndham Worldwide Corp.

      11,235         822,739   
     

 

 

  
      $ 5,608,359   
     

 

 

  

Household Durables — 0.9%

      

Leggett & Platt, Inc.

      11,383       $ 371,541   

Lennar Corp., Class A

      18,642         738,596   

Newell Rubbermaid, Inc.

      76,798         2,296,260   
     

 

 

  
      $ 3,406,397   
     

 

 

  

Household Products — 1.8%

      

Clorox Co. (The)

      6,843       $ 602,252   

Kimberly-Clark Corp.

      19,850         2,188,463   

Procter & Gamble Co.

      52,148         4,203,129   
     

 

 

  
      $ 6,993,844   
     

 

 

  

 

3

 

 

                                                 
Security    Shares      Value  

Industrial Conglomerates — 1.8%

      

3M Co.

      21,663       $ 2,938,803   

General Electric Co.

      160,204         4,147,681   
     

 

 

  
      $ 7,086,484   
     

 

 

  

Insurance — 4.3%

      

ACE, Ltd.

      14,012       $ 1,388,029   

Allstate Corp. (The)

      50,422         2,852,877   

AmTrust Financial Services, Inc.

      3,045         114,522   

Cincinnati Financial Corp.

      23,600         1,148,376   

Lincoln National Corp.

      47,210         2,392,131   

Marsh & McLennan Cos., Inc.

      50,188         2,474,268   

MetLife, Inc.

      14,938         788,726   

Principal Financial Group, Inc.

      29,001         1,333,756   

Prudential Financial, Inc.

      21,629         1,830,895   

Travelers Companies, Inc. (The)

      31,286         2,662,439   
     

 

 

  
      $ 16,986,019   
     

 

 

  

Internet & Catalog Retail — 1.2%

      

Amazon.com, Inc.(1)

      3,372       $ 1,134,746   

Netflix, Inc.(1)

      900         316,827   

priceline.com, Inc.(1)

      1,797         2,141,826   

Shutterfly, Inc.(1)

      28,875         1,232,385   
     

 

 

  
      $ 4,825,784   
     

 

 

  

Internet Software & Services — 3.2%

      

Facebook, Inc., Class A(1)

      14,400       $ 867,456   

Google, Inc., Class A(1)

      8,610         9,595,931   

VeriSign, Inc.(1)

      41,883         2,257,913   
     

 

 

  
      $ 12,721,300   
     

 

 

  

IT Services — 3.2%

      

Fidelity National Information Services, Inc.

      26,132       $ 1,396,756   

International Business Machines Corp.

      33,173         6,385,471   

MasterCard, Inc., Class A

      53,680         4,009,896   

Visa, Inc., Class A

      3,193         689,241   

Xerox Corp.

      7,778         87,891   
     

 

 

  
      $ 12,569,255   
     

 

 

  

Leisure Products — 0.5%

      

Mattel, Inc.

      52,463       $ 2,104,291   
     

 

 

  
      $ 2,104,291   
     

 

 

  

Life Sciences Tools & Services — 0.8%

      

Thermo Fisher Scientific, Inc.

      27,884       $ 3,352,772   
     

 

 

  
      $ 3,352,772   
     

 

 

  

Machinery — 1.2%

      

Caterpillar, Inc.

      31,778       $ 3,157,780   

Snap-On, Inc.

      6,380         724,002   

Stanley Black & Decker, Inc.

      9,483         770,399   
     

 

 

  
      $ 4,652,181   
     

 

 

  

Media — 4.6%

      

CBS Corp., Class B

      41,650       $ 2,573,970   

Comcast Corp., Class A

      106,640         5,334,133   

Omnicom Group, Inc.

      35,123         2,549,930   

Time Warner, Inc.

      36,488         2,383,761   

Walt Disney Co. (The)

      66,962         5,361,647   
     

 

 

  
      $ 18,203,441   
     

 

 

  

 

4

 

 

                                                 
Security    Shares      Value  

Metals & Mining — 0.6%

      

Freeport-McMoRan Copper & Gold, Inc.

      17,655       $ 583,851   

Nucor Corp.

      31,251         1,579,425   
     

 

 

  
      $ 2,163,276   
     

 

 

  

Multi-Utilities — 1.9%

      

Centerpoint Energy, Inc.

      17,504       $ 414,670   

CMS Energy Corp.

      77,060         2,256,317   

Dominion Resources, Inc.

      1,997         141,767   

DTE Energy Co.

      10,342         768,307   

NiSource, Inc.

      49,999         1,776,465   

Public Service Enterprise Group, Inc.

      52,545         2,004,066   
     

 

 

  
      $ 7,361,592   
     

 

 

  

Multiline Retail — 1.0%

      

Kohl’s Corp.

      2,414       $ 137,115   

Macy’s, Inc.

      48,228         2,859,438   

Nordstrom, Inc.

      13,647         852,255   
     

 

 

  
      $ 3,848,808   
     

 

 

  

Oil, Gas & Consumable Fuels — 8.5%

      

Chevron Corp.

      64,342       $ 7,650,907   

ConocoPhillips

      44,430         3,125,651   

EOG Resources, Inc.

      18,452         3,619,729   

Exxon Mobil Corp.

      88,814         8,675,352   

Kinder Morgan, Inc.

      21,161         687,521   

Occidental Petroleum Corp.

      22,277         2,122,775   

Phillips 66

      31,720         2,444,343   

Range Resources Corp.

      20,840         1,729,095   

Tesoro Corp.

      20,477         1,035,931   

Williams Cos., Inc.

      69,781         2,831,713   
     

 

 

  
      $ 33,923,017   
     

 

 

  

Personal Products — 0.1%

      

Estee Lauder Cos., Inc. (The), Class A

      5,729       $ 383,155   
     

 

 

  
      $ 383,155   
     

 

 

  

Pharmaceuticals — 5.6%

      

AbbVie, Inc.

      23,000       $ 1,182,200   

Bristol-Myers Squibb Co.

      80,700         4,192,365   

Johnson & Johnson

      52,116         5,119,355   

Merck & Co., Inc.

      110,434         6,269,338   

Pfizer, Inc.

      171,390         5,505,047   
     

 

 

  
      $ 22,268,305   
     

 

 

  

Professional Services — 0.2%

      

ManpowerGroup, Inc.

      1,193       $ 94,044   

Robert Half International, Inc.

      18,170         762,232   
     

 

 

  
      $ 856,276   
     

 

 

  

Real Estate Investment Trusts (REITs) — 1.6%

      

Apartment Investment & Management Co., Class A

      12,428       $ 375,574   

AvalonBay Communities, Inc.

      11,002         1,444,783   

Equity Residential

      14,774         856,744   

Host Hotels & Resorts, Inc.

      58,590         1,185,861   

Kimco Realty Corp.

      78,276         1,712,679   

ProLogis, Inc.

      22,296         910,346   
     

 

 

  
      $ 6,485,987   
     

 

 

  

 

5

 

 

                                                 
Security    Shares      Value  

Real Estate Management & Development — 0.1%

      

CB Richard Ellis Group, Inc., Class A(1)

      8,158       $ 223,774   
     

 

 

  
      $ 223,774   
     

 

 

  

Road & Rail — 1.0%

      

J.B. Hunt Transport Services, Inc.

      3,521       $ 253,230   

Kansas City Southern

      11,539         1,177,670   

Norfolk Southern Corp.

      27,357         2,658,280   
     

 

 

  
      $ 4,089,180   
     

 

 

  

Semiconductors & Semiconductor Equipment — 1.6%

      

Advanced Micro Devices, Inc.(1)

      352,424       $ 1,413,220   

Analog Devices, Inc.

      16,160         858,742   

Applied Materials, Inc.

      15,313         312,692   

Cree, Inc.(1)

      21,482         1,215,022   

Cypress Semiconductor Corp.(1)

      60,131         617,545   

Intel Corp.

      56,723         1,464,021   

Teradyne, Inc.(1)

      32,470         645,828   
     

 

 

  
      $ 6,527,070   
     

 

 

  

Software — 3.5%

      

Concur Technologies, Inc.(1)

      12,197       $ 1,208,357   

Microsoft Corp.

      201,345         8,253,132   

Oracle Corp.

      103,117         4,218,516   

Symantec Corp.

      8,033         160,419   
     

 

 

  
      $ 13,840,424   
     

 

 

  

Specialty Retail — 1.9%

      

Abercrombie & Fitch Co., Class A

      4,343       $ 167,206   

Advance Auto Parts, Inc.

      3,365         425,672   

AutoNation, Inc.(1)

      5,400         287,442   

Bed Bath & Beyond, Inc.(1)

      1,176         80,909   

Home Depot, Inc. (The)

      61,880         4,896,564   

Lowe’s Companies, Inc.

      6,531         319,366   

Tiffany & Co.

      14,641         1,261,322   
     

 

 

  
      $ 7,438,481   
     

 

 

  

Technology Hardware, Storage & Peripherals — 3.5%

      

Apple, Inc.

      25,674       $ 13,780,263   
     

 

 

  
      $ 13,780,263   
     

 

 

  

Textiles, Apparel & Luxury Goods — 0.3%

      

NIKE, Inc., Class B

      15,176       $ 1,120,899   
     

 

 

  
      $ 1,120,899   
     

 

 

  

Tobacco — 1.4%

      

Lorillard, Inc.

      5,365       $ 290,139   

Philip Morris International, Inc.

      63,905         5,231,903   
     

 

 

  
      $ 5,522,042   
     

 

 

  

Trading Companies & Distributors — 0.1%

      

Fastenal Co.

      10,080       $ 497,146   
     

 

 

  
      $ 497,146   
     

 

 

  

Total Common Stocks — 100.4%
(identified cost $191,050,930)

       $     398,953,622   
     

 

 

  

 

6

 

 

                                                                                                   

Call Options Written — (0.8)%

            
Description   

Number of

Contracts

     

Strike

Price

     

Expiration

Date

      Value  

S&P 500 Index

      470       $ 1,890         4/4/14       $ (117,500 ) 

S&P 500 Index

      460         1,865         4/11/14         (853,300 ) 

S&P 500 Index

      550         1,870         4/19/14         (1,009,250 ) 

S&P 500 Index

      540         1,875         4/25/14         (1,042,200 ) 
           

 

 

  

Total Call Options Written
(premiums received $3,074,216)

             $ (3,022,250 ) 
           

 

 

  

Other Assets, Less Liabilities — 0.4%

             $ 1,396,528   
           

 

 

  

Net Assets — 100.0%

             $     397,327,900   
           

 

 

  

The percentage shown for each investment category in the Portfolio of Investments is based on net assets.

 

(1) Non-income producing security.

The cost and unrealized appreciation (depreciation) of investments of the Fund at March 31, 2014, as determined on a federal income tax basis, were as follows:

 

Aggregate cost

    $ 190,962,206   
  

 

 

  

Gross unrealized appreciation

    $ 208,061,692   

Gross unrealized depreciation

      (70,276 ) 
  

 

 

  

Net unrealized appreciation

    $     207,991,416   
  

 

 

  

Written options activity for the fiscal year to date ended March 31, 2014 was as follows:

 

     Number of
Contracts		     Premiums
Received		  

Outstanding, beginning of period

      2,085      $     3,225,262   

Options written

      6,640        10,320,095   

Options terminated in closing purchase transactions

      (4,640 )      (7,114,381 ) 

Options expired

      (2,065 )      (3,356,760 ) 
  

 

 

    

 

 

  
Outstanding, end of period      2,020      $ 3,074,216   
  

 

 

    

 

 

  

All of the assets of the Fund are subject to segregation to satisfy the requirements of the escrow agent. At March 31, 2014, the Fund had sufficient cash and/or securities to cover commitments under these contracts.

The Fund is subject to equity price risk in the normal course of pursuing its investment objectives. The Fund writes index call options above the current value of the index to generate premium income. In writing index call options, the Fund in effect, sells potential appreciation in the value of the applicable index 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 index decline.

At March 31, 2014, 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 $3,022,250.

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 fund’s own assumptions in determining the fair value of investments)

 

7

 

 

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.

At March 31, 2014, the hierarchy of inputs used in valuing the Fund’s investments and open derivative instruments, which are carried at value, were as follows:

 

Asset Description    Level 1     Level 2      Level 3      Total  

Common Stocks

    $     398,953,622 *    $ —       $ —       $     398,953,622   

Total Investments

    $ 398,953,622      $ —       $ —       $ 398,953,622   
Liability Description                               

Call Options Written

    $ (3,022,250 )    $ —       $ —       $ (3,022,250 ) 

Total

    $ (3,022,250 )    $     —       $     —       $ (3,022,250 ) 

 

* The level classification by major category of investments is the same as the category presentation in the Portfolio of Investments.

The Fund held no investments or other financial instruments as of December 31, 2013 whose fair value was determined using Level 3 inputs. At March 31, 2014, there were no investments transferred between Level 1 and Level 2 during the fiscal year to date then ended.

For information on the Fund’s policy regarding the valuation of investments and other significant accounting policies, please refer to the Fund’s most recent financial statements included in its semiannual or annual report to shareholders.

 

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Item 2. Controls and Procedures

(a) It is the conclusion of the registrant’s principal executive officer and principal financial officer that the effectiveness of the registrant’s 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 Commission’s 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 registrant’s principal executive officer and principal financial officer in order to allow timely decisions regarding required disclosure.

(b) There have been no changes in the registrant’s 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 registrant’s 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 Tax-Managed Buy-Write Income Fund

 

By:   /s/ Walter A. Row, III
  Walter A. Row, III
  President
Date:   May 23, 2014

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/ Walter A. Row, III
  Walter A. Row, III
  President
Date:   May 23, 2014

 

By:   /s/ James F. Kirchner
  James F. Kirchner
  Treasurer
Date:   May 23, 2014