Regulatory Filings • May 28, 2015
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Download Source FileN-Q 1 d921764dnq.htm EATON VANCE ENHANCED EQUITY INCOME FUND II Eaton Vance Enhanced Equity Income Fund II
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form N-Q
QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
811-21670
Investment Company Act File Number
Eaton Vance Enhanced Equity Income Fund II
(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)
December 31
Date of Fiscal Year End
March 31, 2015
Date of Reporting Period
Item 1. Schedule of Investments
Eaton Vance
Enhanced Equity Income Fund II
March 31, 2015
PORTFOLIO OF INVESTMENTS (Unaudited)
Common Stocks 99.6% (1)
| Security | Value | |
|---|---|---|
| Aerospace & Defense 2.3% | ||
| Boeing Co. (The) | 46,385 | $ 6,961,461 |
| Spirit AeroSystems Holdings, Inc., Class A (2) | 180,769 | 9,437,949 |
| $ 16,399,410 | ||
| Banks 2.2% | ||
| Citigroup, Inc. | 134,103 | $ 6,908,986 |
| PNC Financial Services Group, Inc. (The) | 36,483 | 3,401,675 |
| Wells Fargo & Co. | 103,355 | 5,622,512 |
| $ 15,933,173 | ||
| Beverages 2.7% | ||
| Constellation Brands, Inc., Class A (2) | 85,053 | $ 9,884,009 |
| PepsiCo, Inc. | 96,080 | 9,187,170 |
| $ 19,071,179 | ||
| Biotechnology 8.4% | ||
| Amgen, Inc. | 44,164 | $ 7,059,615 |
| Biogen, Inc. (2) | 45,220 | 19,093,693 |
| Celgene Corp. (2) | 165,321 | 19,058,205 |
| Gilead Sciences, Inc. (2) | 70,909 | 6,958,300 |
| Incyte Corp. (2) | 39,439 | 3,614,979 |
| Vertex Pharmaceuticals, Inc. (2) | 33,821 | 3,989,863 |
| $ 59,774,655 | ||
| Capital Markets 2.0% | ||
| Charles Schwab Corp. (The) | 187,062 | $ 5,694,167 |
| Invesco, Ltd. | 206,491 | 8,195,628 |
| $ 13,889,795 | ||
| Chemicals 1.6% | ||
| Monsanto Co. | 100,110 | $ 11,266,379 |
| $ 11,266,379 | ||
| Consumer Finance 0.9% | ||
| Discover Financial Services | 106,850 | $ 6,020,998 |
| $ 6,020,998 | ||
| Electrical Equipment 0.6% | ||
| Eaton Corp. PLC | 63,848 | $ 4,337,833 |
| $ 4,337,833 | ||
| Energy Equipment & Services 1.6% | ||
| Halliburton Co. | 61,533 | $ 2,700,068 |
| Schlumberger, Ltd. | 101,486 | 8,467,992 |
| $ 11,168,060 | ||
| Food & Staples Retailing 1.0% | ||
| Sprouts Farmers Market, Inc. (2) | 192,473 | $ 6,780,824 |
| $ 6,780,824 | ||
| Food Products 6.1% | ||
| Hain Celestial Group, Inc. (The) (2) | 155,422 | $ 9,954,779 |
| Hershey Co. (The) | 61,864 | 6,242,696 |
| Keurig Green Mountain, Inc. | 69,306 | 7,743,560 |
| Mondelez International, Inc., Class A | 195,000 | 7,037,550 |
| WhiteWave Foods Co. (The), Class A (2) | 277,920 | 12,322,973 |
| $ 43,301,558 |
1
| Security | Value | |
|---|---|---|
| Health Care Equipment & Supplies 4.9% | ||
| Cooper Cos., Inc. (The) | 48,591 | $ 9,106,925 |
| Medtronic PLC | 222,479 | 17,351,137 |
| Stryker Corp. | 91,419 | 8,433,403 |
| $ 34,891,465 | ||
| Health Care Technology 1.6% | ||
| Cerner Corp. (2) | 159,391 | $ 11,676,985 |
| $ 11,676,985 | ||
| Hotels, Restaurants & Leisure 2.7% | ||
| Las Vegas Sands Corp. | 88,475 | $ 4,869,664 |
| Starbucks Corp. | 152,455 | 14,437,489 |
| $ 19,307,153 | ||
| Internet & Catalog Retail 5.2% | ||
| Amazon.com, Inc. (2) | 57,337 | $ 21,335,098 |
| Priceline Group, Inc. (The) (2) | 13,041 | 15,181,680 |
| $ 36,516,778 | ||
| Internet Software & Services 9.8% | ||
| Facebook, Inc., Class A (2) | 274,098 | $ 22,534,967 |
| Google, Inc., Class C (2) | 68,390 | 37,477,720 |
| Twitter, Inc. (2) | 183,750 | 9,202,200 |
| $ 69,214,887 | ||
| IT Services 4.0% | ||
| Fiserv, Inc. (2) | 117,089 | $ 9,296,867 |
| Visa, Inc., Class A | 296,228 | 19,376,273 |
| $ 28,673,140 | ||
| Leisure Products 0.7% | ||
| Brunswick Corp. | 91,808 | $ 4,723,522 |
| $ 4,723,522 | ||
| Life Sciences Tools & Services 0.7% | ||
| Illumina, Inc. (2) | 27,044 | $ 5,020,448 |
| $ 5,020,448 | ||
| Machinery 0.9% | ||
| Donaldson Co., Inc. | 169,335 | $ 6,385,623 |
| $ 6,385,623 | ||
| Media 4.2% | ||
| Comcast Corp., Class A | 254,258 | $ 14,357,949 |
| Walt Disney Co. (The) | 143,683 | 15,070,910 |
| $ 29,428,859 | ||
| Multiline Retail 1.3% | ||
| Dollar General Corp. (2) | 120,945 | $ 9,116,834 |
| $ 9,116,834 | ||
| Oil, Gas & Consumable Fuels 1.0% | ||
| EOG Resources, Inc. | 34,741 | $ 3,185,402 |
| Range Resources Corp. | 71,023 | 3,696,037 |
| $ 6,881,439 | ||
| Personal Products 0.8% | ||
| Estee Lauder Cos., Inc. (The), Class A | 69,059 | $ 5,742,946 |
| $ 5,742,946 |
2
| Security | Shares | Value |
|---|---|---|
| Pharmaceuticals 3.1% | ||
| Bristol-Myers Squibb Co. | 127,002 | $ 8,191,629 |
| Perrigo Co. PLC | 83,833 | 13,878,553 |
| $ 22,070,182 | ||
| Road & Rail 2.7% | ||
| Genesee & Wyoming, Inc., Class A (2) | 72,386 | $ 6,980,906 |
| Union Pacific Corp. | 114,224 | 12,371,601 |
| $ 19,352,507 | ||
| Semiconductors & Semiconductor Equipment 3.6% | ||
| Avago Technologies, Ltd. | 102,806 | $ 13,054,306 |
| NXP Semiconductors NV (2) | 126,800 | 12,725,648 |
| $ 25,779,954 | ||
| Software 6.0% | ||
| Microsoft Corp. | 326,310 | $ 13,266,133 |
| salesforce.com, inc. (2) | 185,366 | 12,384,303 |
| Tableau Software, Inc., Class A (2) | 116,820 | 10,808,186 |
| VMware, Inc., Class A (2) | 69,976 | 5,738,732 |
| $ 42,197,354 | ||
| Specialty Retail 6.4% | ||
| Home Depot, Inc. (The) | 112,586 | $ 12,790,895 |
| Restoration Hardware Holding, Inc. (2) | 70,169 | 6,960,063 |
| Signet Jewelers, Ltd. | 83,213 | 11,549,132 |
| TJX Cos., Inc. (The) | 197,670 | 13,846,784 |
| $ 45,146,874 | ||
| Technology Hardware, Storage & Peripherals 8.2% | ||
| Apple, Inc. | 375,500 | $ 46,723,465 |
| EMC Corp. | 456,424 | 11,666,197 |
| $ 58,389,662 | ||
| Textiles, Apparel & Luxury Goods 1.6% | ||
| NIKE, Inc., Class B | 115,696 | $ 11,607,780 |
| $ 11,607,780 | ||
| Trading Companies & Distributors 0.8% | ||
| W.W. Grainger, Inc. | 24,606 | $ 5,802,341 |
| $ 5,802,341 | ||
| Total Common Stocks (identified cost $574,816,981) | $ 705,870,597 | |
| Short-Term Investments 0.8% | ||
| Description | Interest (000s omitted) | Value |
| Eaton Vance Cash Reserves Fund, LLC, 0.18% (3) | $ 5,696 | $ 5,696,415 |
| Total Short-Term Investments (identified cost $5,696,415) | $ 5,696,415 | |
| Total Investments 100.4% (identified cost $580,513,396) | $ 711,567,012 |
3
| Covered Call Options Written (0.4)% — Security | Number of Contracts | Strike Price | Expiration Date | Value | |
|---|---|---|---|---|---|
| Amazon.com, Inc. | 285 | $ 397.50 | 5/1/15 | $ (206,625 | ) |
| Amgen, Inc. | 220 | 175.00 | 4/24/15 | (12,980 | ) |
| Apple, Inc. | 1,875 | 132.00 | 5/1/15 | (360,000 | ) |
| Avago Technologies, Ltd. | 510 | 135.00 | 4/17/15 | (62,475 | ) |
| Biogen, Inc. | 225 | 510.00 | 4/24/15 | (15,750 | ) |
| Boeing Co. (The) | 230 | 160.00 | 5/1/15 | (15,870 | ) |
| Bristol-Myers Squibb Co. | 545 | 67.50 | 4/17/15 | (11,445 | ) |
| Brunswick Corp. | 455 | 55.00 | 5/15/15 | (30,713 | ) |
| Celgene Corp. | 825 | 135.00 | 4/24/15 | (30,938 | ) |
| Cerner Corp. | 795 | 75.00 | 4/17/15 | (47,700 | ) |
| Charles Schwab Corp. (The) | 485 | 32.00 | 4/17/15 | (8,488 | ) |
| Citigroup, Inc. | 670 | 54.00 | 5/1/15 | (27,805 | ) |
| Comcast Corp., Class A | 1,270 | 58.50 | 5/1/15 | (74,295 | ) |
| Constellation Brands, Inc., Class A | 425 | 120.00 | 4/17/15 | (63,750 | ) |
| Cooper Cos., Inc. (The) | 240 | 190.00 | 5/15/15 | (86,400 | ) |
| Discover Financial Services | 530 | 59.50 | 5/1/15 | (19,875 | ) |
| Dollar General Corp. | 600 | 76.50 | 4/24/15 | (55,500 | ) |
| Donaldson Co., Inc. | 845 | 40.00 | 4/17/15 | (10,563 | ) |
| Eaton Corp. PLC | 315 | 70.50 | 4/10/15 | (3,938 | ) |
| EMC Corp. | 2,280 | 26.50 | 5/1/15 | (85,500 | ) |
| EOG Resources, Inc. | 170 | 96.50 | 5/1/15 | (16,830 | ) |
| Estee Lauder Cos., Inc. (The), Class A | 345 | 87.50 | 5/15/15 | (33,638 | ) |
| Facebook, Inc., Class A | 1,370 | 90.00 | 5/1/15 | (106,860 | ) |
| Genesee & Wyoming, Inc., Class A | 360 | 110.00 | 4/17/15 | (9,000 | ) |
| Gilead Sciences, Inc. | 350 | 107.00 | 5/1/15 | (41,125 | ) |
| Google, Inc., Class C | 340 | 580.00 | 4/2/15 | (850 | ) |
| Hain Celestial Group, Inc. (The) | 775 | 67.50 | 5/15/15 | (98,813 | ) |
| Halliburton Co. | 305 | 46.00 | 5/1/15 | (17,385 | ) |
| Hershey Co. (The) | 305 | 105.00 | 5/15/15 | (33,550 | ) |
| Home Depot, Inc. (The) | 560 | 121.00 | 4/24/15 | (13,160 | ) |
| Illumina, Inc. | 70 | 202.50 | 4/10/15 | (1,400 | ) |
| Invesco, Ltd. | 1,030 | 44.00 | 5/15/15 | (10,300 | ) |
| Keurig Green Mountain, Inc. | 345 | 130.00 | 4/24/15 | (8,280 | ) |
| Las Vegas Sands Corp. | 440 | 57.50 | 4/10/15 | (11,440 | ) |
| Medtronic PLC | 1,110 | 80.00 | 4/24/15 | (64,380 | ) |
| Microsoft Corp. | 1,630 | 43.00 | 5/1/15 | (53,790 | ) |
| Mondelez International, Inc., Class A | 975 | 39.00 | 4/17/15 | (9,750 | ) |
| Monsanto Co. | 500 | 117.00 | 5/1/15 | (48,250 | ) |
| NIKE, Inc., Class B | 575 | 106.00 | 4/24/15 | (11,788 | ) |
| NXP Semiconductors NV | 630 | 105.00 | 4/17/15 | (92,925 | ) |
| PepsiCo, Inc. | 480 | 99.50 | 5/1/15 | (37,680 | ) |
| Perrigo Co. PLC | 385 | 180.00 | 4/17/15 | (14,438 | ) |
| PNC Financial Services Group, Inc. (The) | 180 | 95.00 | 4/17/15 | (12,870 | ) |
| Priceline Group, Inc. (The) | 65 | 1,275.00 | 4/17/15 | (6,013 | ) |
| Range Resources Corp. | 355 | 57.50 | 5/15/15 | (40,825 | ) |
| Restoration Hardware Holding, Inc. | 350 | 105.00 | 5/15/15 | (70,000 | ) |
| salesforce.com, inc. | 925 | 75.00 | 4/17/15 | (4,163 | ) |
| Schlumberger, Ltd. | 505 | 87.50 | 5/1/15 | (37,118 | ) |
| Signet Jewelers, Ltd. | 415 | 140.00 | 5/15/15 | (131,763 | ) |
| Spirit AeroSystems Holdings, Inc., Class A | 900 | 55.00 | 5/15/15 | (90,000 | ) |
| Sprouts Farmers Market, Inc. | 960 | 35.00 | 5/15/15 | (146,400 | ) |
| Starbucks Corp. | 760 | 101.00 | 4/24/15 | (38,760 | ) |
| Stryker Corp. | 450 | 97.50 | 5/15/15 | (36,000 | ) |
| Tableau Software, Inc., Class A | 580 | 102.00 | 4/24/15 | (42,050 | ) |
4
| Security — TJX Cos., Inc. (The) | 985 | Strike Price — $ 72.50 | 4/17/15 | Value — $ (22,163 | ) |
|---|---|---|---|---|---|
| Twitter, Inc. | 915 | 51.50 | 4/24/15 | (133,133 | ) |
| Union Pacific Corp. | 570 | 121.00 | 4/10/15 | (3,705 | ) |
| Vertex Pharmaceuticals, Inc. | 165 | 145.00 | 4/24/15 | (18,563 | ) |
| Visa, Inc., Class A | 1,480 | 70.63 | 4/24/15 | (20,720 | ) |
| VMware, Inc., Class A | 345 | 87.50 | 5/1/15 | (50,025 | ) |
| W.W. Grainger, Inc. | 120 | 250.00 | 5/15/15 | (18,000 | ) |
| Walt Disney Co. (The) | 715 | 110.00 | 4/17/15 | (16,445 | ) |
| Wells Fargo & Co. | 515 | 56.50 | 5/1/15 | (18,025 | ) |
| WhiteWave Foods Co. (The), Class A | 1,390 | 47.50 | 5/15/15 | (156,375 | ) |
| Total Covered Call Options Written (premiums received $4,325,752) | $ (3,079,358 | ) | |||
| Other Assets, Less Liabilities (0.0)% (4) | $ (76,679 | ) | |||
| Net Assets 100.0% | $ 708,410,975 |
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 March 31, 2015 has been pledged as collateral for such written option.
(2) Non-income producing security.
(3) 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 March 31, 2015. Net income allocated from the investment in Eaton Vance Cash Reserves Fund, LLC for the fiscal year to date ended March 31, 2015 was $3,664.
(4) Amount is less than (0.05)%.
Written options activity for the fiscal year to date ended March 31, 2015 was as follows:
| Outstanding, beginning of period | 40,542 | $ | 3,705,852 | |
|---|---|---|---|---|
| Options written | 102,114 | 11,229,497 | ||
| Options terminated in closing purchase transactions | (49,080 | ) | (5,258,322 | ) |
| Options expired | (53,256 | ) | (5,351,275 | ) |
| Outstanding, end of period | 40,320 | $ | 4,325,752 |
At March 31, 2015, the Fund had sufficient cash and/or securities to cover commitments under these contracts.
5
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 March 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 $3,079,358.
The cost and unrealized appreciation (depreciation) of investments of the Fund at March 31, 2015, as determined on a federal income tax basis, were as follows:
| Aggregate cost | $ | |
|---|---|---|
| Gross unrealized appreciation | $ 140,878,145 | |
| Gross unrealized depreciation | (9,823,479 | ) |
| Net unrealized appreciation | $ 131,054,666 |
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.
At March 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 | $ 705,870,597 | * | $ | $ | $ 705,870,597 | |
| Short-Term Investments | | 5,696,415 | | 5,696,415 | ||
| Total Investments | $ 705,870,597 | $ 5,696,415 | $ | $ 711,567,012 | ||
| Liability Description | ||||||
| Covered Call Options Written | $ (3,079,358 | ) | $ | $ | $ (3,079,358 | ) |
| Total | $ (3,079,358 | ) | $ | $ | $ (3,079,358 | ) |
The Fund held no investments or other financial instruments as of December 31, 2014 whose fair value was determined using Level 3 inputs. At March 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 II
| By: | /s/ Walter A. Row, III |
|---|---|
| Walter A. Row, III | |
| President | |
| Date: | May 22, 2015 |
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 22, 2015 |
| By: | /s/ James F. Kirchner |
|---|---|
| James F. Kirchner | |
| Treasurer | |
| Date: | May 22, 2015 |
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