Eaton Vance is rolling out a new tax-managed fund that promises to take advantage of the new tax rules governing dividend income. The Chicago fund firm believes that its Tax-Managed Dividend Income Fund will be the first to manage its portfolio to the recent tax code changes from its inception.

The fund will invest primarily in a diversified portfolio of common and preferred stocks that pay dividends qualifying for federal income taxation at long-term capital gains rates. Changes to the tax code signed into law earlier this year drop the maximum tax rate on dividends to 15 percent from 35 percent

"The tax rules that apply to dividend income are complicated, and many dividends do not qualify for favorable tax treatment," stated James B. Hawkes, chairman, chief executive officer and president of Eaton Vance Corp. "For investors who pay taxes on their mutual fund distributions, it is critical that the fund's advisor seek dividends that qualify for favorable tax treatment. The Fund gives taxpaying equity income investors the assurance that their objective of after-tax returns is shared by the Fund's advisor."

Michael R. Mach and Judith A. Saryan -- both vice presidents at Eaton Vance Management -- will handle portfolio management duties for the fund. Mach also manages the Eaton Vance Tax-Managed Value Fund and Eaton Vance Large-Cap Value Fund. Saryan is the portfolio manager of Eaton Vance Utilities Fund.  

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