What will happen to the replacement fund or alternative investment options that Eaton Vance may recommend to current investors? | EVM (Aug 06, 2025) | Candlesense
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What will happen to the replacement fund or alternative investment options that Eaton Vance may recommend to current investors?

What will happen to the replacement‑fund or alternative‑investment options that Eaton Vance may recommend to current investors?

When a municipal‑bond fund is liquidated, the fund’s assets are not simply “vanished.” The liquidation process is designed to give current shareholders a clear, orderly path to re‑allocate the capital that was in the fund. In the case of the Eaton Vance California Municipal Bond Fund (EVM) and the Eaton Vance New York Municipal Bond Fund (ENX), the Board of Trustees has approved a Liquidation and Termination proposal that will be carried out under the following framework:

Step What the investor can expect
1. Formal Notice & Detailed Liquidation Plan Shortly after the Board’s approval, Eaton Vance will issue a formal “Notice of Liquidation” (often called a “Liquidation Notice”) that outlines the timeline, the method of asset disposition, and the specific alternatives that will be offered to shareholders. This notice is required by the SEC and the NYSE American exchange and will be sent to all shareholders of record.
2. Distribution of the Fund’s Net Assets As the fund’s securities are sold (or, where possible, transferred in‑kind), the net proceeds will be calculated on a per‑share basis. Those proceeds will be credited to each shareholder’s account on the “liquidation settlement date.”
3. Recommendation of a Replacement Fund or Alternative Investments In the liquidation notice, Eaton Vance will identify one or more replacement vehicles (e.g., another Eaton Vance municipal‑bond fund, a broader “core” municipal‑bond portfolio, or a diversified fixed‑income fund) that it believes best matches the original fund’s investment objectives, risk profile, and tax‑exposure characteristics. If a single replacement fund is not available, Eaton Vance will typically present a menu of alternative investment options such as:
• A comparable Eaton Vance municipal‑bond fund (e.g., a national‑municipal fund)
• A multi‑manager municipal‑bond fund that offers similar credit‑quality and duration
• A diversified “core” fixed‑income fund that includes a municipal‑bond component
• An “custom” portfolio built from a basket of individual municipal securities (for larger investors).
4. Automatic Transfer (if a replacement fund is designated) When Eaton Vance designates a specific replacement fund, the liquidation proceeds are often automatically transferred into that fund on the settlement date, so the shareholder’s investment continues without any action required. This is the most common approach for “liquidation‑to‑replacement” proposals.
5. Opt‑Out / Choose‑Your‑Own‑Alternative If Eaton Vance offers a choice of alternatives, shareholders will be given a limited window (typically 30 – 45 days) to elect which option they want to receive. The options may include:
• Acceptance of the recommended replacement fund (automatic transfer).
• Receiving the cash proceeds and reinvesting them elsewhere on their own.
• Selecting another Eaton Vance fund or a third‑party fund that meets the stated criteria.
6. Tax‑Reporting & Confirmation After the liquidation date, Eaton Vance will provide a final tax statement (Form 1099‑B/1099‑DIV) showing the amount of cash or securities received, any capital gains/losses recognized, and the cost basis of the new holdings. This enables shareholders to report the transaction correctly on their 2025‑2026 tax returns.
7. Ongoing Support Throughout the process, Eaton Vance’s client‑service team will field questions, provide guidance on the alternatives, and help investors who may need to move the cash proceeds into a different brokerage account or a non‑Eaton Vance fund.

Key Take‑aways for Current Investors

  1. The fund will cease to exist – the EVM and ENX funds will be terminated, and all underlying municipal‑bond holdings will be sold or transferred.
  2. You will not be left with an empty account – the net assets will be converted into cash (or, where possible, into a replacement security) and credited to your account.
  3. Eaton Vance will suggest a “next‑step” investment – typically a comparable municipal‑bond fund that mirrors the original fund’s credit‑quality, duration, and tax‑exposure profile.
  4. You will have a choice – if multiple alternatives are offered, you can elect the one that best fits your objectives, or you can simply take the cash and invest elsewhere on your own.
  5. All details will be communicated in a formal liquidation notice – that notice will spell out the exact replacement fund(s) or alternative options, the deadline for any election, and the mechanics of the transfer.

Practical Action for Investors

  • Read the upcoming liquidation notice carefully – it will list the exact replacement fund(s) and any alternative options, plus the dates you must act by.
  • Assess whether the recommended replacement aligns with your investment goals (e.g., state‑specific tax exposure, credit‑quality, duration).
  • If you prefer a different investment, decide whether to take the cash proceeds and reinvest on your own, or to request a transfer to another Eaton Vance or third‑party fund during the election window.
  • Consult a tax advisor to understand any capital‑gain implications of the liquidation and the subsequent purchase of a new fund.
  • Contact Eaton Vance’s client‑service team if you need clarification on the alternatives, the transfer process, or any paperwork required for the election.

Bottom line: The liquidation of EVM and ENX will end those funds, but Eaton Vance will provide a structured, investor‑friendly pathway to move the proceeds into a recommended replacement municipal‑bond fund or other alternative investment(s). Shareholders will receive detailed instructions, a choice of options (including an automatic transfer to a comparable fund), and the necessary support to complete the transition smoothly.

Other Questions About This News

What are the potential effects on liquidity and bid‑ask spreads for the ETFs during the wind‑down period? How will the liquidation affect the net asset value (NAV) and market price of the EVM and ENX ETFs? Will there be any tax implications for investors receiving the liquidation proceeds? Are there any underlying municipal bond holdings that could experience price pressure when sold on the open market? How might this liquidation influence the broader municipal bond market sentiment and investor demand? Will the liquidation trigger any regulatory or compliance actions that could affect the distribution of proceeds? How does the liquidation compare to recent similar municipal bond fund closures in terms of scale and impact? What is the expected impact on the performance of related municipal bond indices during the liquidation period? What is the expected timeline for the liquidation and distribution of assets to shareholders?