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, 2016

Date of Reporting Period

 

 

 

Item 1. Schedule of Investments

Eaton Vance

Tax-Managed Buy-Write Income Fund

March 31, 2016

PORTFOLIO OF INVESTMENTS (Unaudited)

Common Stocks — 101.8%

 

                                                 
Security    Shares      Value  

Aerospace & Defense — 3.8%

      

Boeing Co. (The)

      23,410       $ 2,971,665   

Honeywell International, Inc.

      38,263         4,287,369   

Northrop Grumman Corp.

      16,521         3,269,506   

Textron, Inc.

      11,648         424,686   

United Technologies Corp.

      33,819         3,385,282   
     

 

 

  
      $ 14,338,508   
     

 

 

  

Air Freight & Logistics — 0.4%

      

C.H. Robinson Worldwide, Inc.

      7,252       $ 538,316   

United Parcel Service, Inc., Class B

      10,003         1,055,016   
     

 

 

  
      $ 1,593,332   
     

 

 

  

Airlines — 0.5%

      

American Airlines Group, Inc.

      4,452       $ 182,576   

Southwest Airlines Co.

      36,616         1,640,397   
     

 

 

  
      $ 1,822,973   
     

 

 

  

Auto Components — 0.7%

      

Dana Holding Corp.

      31,658       $ 446,061   

Goodyear Tire & Rubber Co. (The)

      3,713         122,455   

Johnson Controls, Inc.

      36,367         1,417,222   

Lear Corp.

      7,250         805,982   
     

 

 

  
      $ 2,791,720   
     

 

 

  

Automobiles — 0.1%

      

Ford Motor Co.

      20,730       $ 279,855   
     

 

 

  
      $ 279,855   
     

 

 

  

Banks — 6.1%

      

Bank of America Corp.

      131,359       $ 1,775,974   

BankUnited, Inc.

      10,483         361,034   

Citigroup, Inc.

      100,379         4,190,823   

Fifth Third Bancorp

      57,446         958,774   

JPMorgan Chase & Co.

      85,013         5,034,470   

KeyCorp

      85,122         939,747   

M&T Bank Corp.

      5,096         565,656   

PNC Financial Services Group, Inc. (The)

      18,419         1,557,695   

SunTrust Banks, Inc.

      5,538         199,811   

Wells Fargo & Co.

      146,381         7,078,985   
     

 

 

  
      $ 22,662,969   
     

 

 

  

Beverages — 2.9%

      

Coca-Cola Co. (The)

      136,579       $ 6,335,900   

PepsiCo, Inc.

      43,722         4,480,630   
     

 

 

  
      $ 10,816,530   
     

 

 

  

Biotechnology — 3.6%

      

AbbVie, Inc.

      21,079       $ 1,204,032   

Amgen, Inc.

      18,988         2,846,871   

Baxalta, Inc.

      37,878         1,530,271   

Celgene Corp.(1)

      38,661         3,869,579   

Gilead Sciences, Inc.

      41,408         3,803,739   

Vertex Pharmaceuticals, Inc.(1)

      1,850         147,057   
     

 

 

  
      $ 13,401,549   
     

 

 

  

 

1

 

 

                                                 
Security    Shares      Value  

Capital Markets — 1.1%

      

Invesco, Ltd.

      38,480       $ 1,184,030   

Lazard, Ltd., Class A

      21,525         835,170   

Legg Mason, Inc.

      7,629         264,574   

State Street Corp.

      28,766         1,683,386   
     

 

 

  
      $ 3,967,160   
     

 

 

  

Chemicals — 2.2%

      

CF Industries Holdings, Inc.

      4,254       $ 133,320   

Dow Chemical Co. (The)

      45,132         2,295,414   

E.I. du Pont de Nemours & Co.

      45,079         2,854,402   

Eastman Chemical Co.

      3,608         260,606   

Sherwin-Williams Co. (The)

      9,183         2,614,125   
     

 

 

  
      $ 8,157,867   
     

 

 

  

Commercial Services & Supplies — 0.1%

      

Waste Management, Inc.

      4,649       $ 274,291   
     

 

 

  
      $ 274,291   
     

 

 

  

Communications Equipment — 1.0%

      

Brocade Communications Systems, Inc.

      42,403       $ 448,624   

Cisco Systems, Inc.

      121,962         3,472,258   
     

 

 

  
      $ 3,920,882   
     

 

 

  

Consumer Finance — 1.0%

      

American Express Co.

      25,226       $ 1,548,876   

Discover Financial Services

      40,754         2,075,194   
     

 

 

  
      $ 3,624,070   
     

 

 

  

Containers & Packaging — 0.5%

      

Avery Dennison Corp.

      15,307       $ 1,103,788   

WestRock Co.

      16,727         652,855   
     

 

 

  
      $ 1,756,643   
     

 

 

  

Distributors — 0.7%

      

Genuine Parts Co.

      27,494       $ 2,731,804   
     

 

 

  
      $ 2,731,804   
     

 

 

  

Diversified Financial Services — 1.9%

      

Berkshire Hathaway, Inc., Class B(1)

      29,508       $ 4,186,595   

McGraw Hill Financial, Inc.

      30,789         3,047,495   
     

 

 

  
      $ 7,234,090   
     

 

 

  

Diversified Telecommunication Services — 2.4%

      

AT&T, Inc.

      132,177       $ 5,177,373   

CenturyLink, Inc.

      12,000         383,520   

Level 3 Communications, Inc.(1)

      6,823         360,595   

Verizon Communications, Inc.

      55,283         2,989,705   
     

 

 

  
      $ 8,911,193   
     

 

 

  

Electric Utilities — 1.2%

      

Duke Energy Corp.

      23,843       $ 1,923,653   

Edison International

      20,090         1,444,270   

Pinnacle West Capital Corp.

      7,168         538,102   

Xcel Energy, Inc.

      12,009         502,217   
     

 

 

  
      $ 4,408,242   
     

 

 

  

Electrical Equipment — 0.7%

      

Emerson Electric Co.

      44,837       $ 2,438,236   
     

 

 

  
      $ 2,438,236   
     

 

 

  

Energy Equipment & Services — 1.3%

      

Halliburton Co.

      53,378       $ 1,906,662   

Schlumberger, Ltd.

      39,317         2,899,629   
     

 

 

  
      $ 4,806,291   
     

 

 

  

 

2

 

 

                                                 
Security    Shares      Value  

Food & Staples Retailing — 2.2%

      

Costco Wholesale Corp.

      5,230       $ 824,143   

CVS Health Corp.

      47,515         4,928,731   

Wal-Mart Stores, Inc.

      33,228         2,275,786   

Walgreens Boots Alliance, Inc.

      671         56,525   
     

 

 

  
      $ 8,085,185   
     

 

 

  

Food Products — 1.5%

      

Kellogg Co.

      14,423       $ 1,104,081   

Kraft Heinz Co. (The)

      8,326         654,091   

Mondelez International, Inc., Class A

      46,954         1,883,794   

Tyson Foods, Inc., Class A

      28,696         1,912,875   
     

 

 

  
      $ 5,554,841   
     

 

 

  

Health Care Equipment & Supplies — 2.2%

      

Abbott Laboratories

      73,588       $ 3,078,186   

Baxter International, Inc.

      37,878         1,556,028   

Medtronic PLC

      4,768         357,600   

Stryker Corp.

      26,801         2,875,480   

Zimmer Biomet Holdings, Inc.

      3,848         410,312   
     

 

 

  
      $ 8,277,606   
     

 

 

  

Health Care Providers & Services — 1.6%

      

DaVita HealthCare Partners, Inc.(1)

      2,916       $ 213,976   

Express Scripts Holding Co.(1)

      3,165         217,404   

UnitedHealth Group, Inc.

      39,575         5,101,217   

VCA, Inc.(1)

      11,050         637,475   
     

 

 

  
      $ 6,170,072   
     

 

 

  

Hotels, Restaurants & Leisure — 1.5%

      

Marriott International, Inc., Class A

      14,651       $ 1,042,858   

Marriott Vacations Worldwide Corp.

      2,064         139,320   

McDonald’s Corp.

      27,950         3,512,756   

Wyndham Worldwide Corp.

      11,235         858,691   
     

 

 

  
      $ 5,553,625   
     

 

 

  

Household Durables — 1.1%

      

Leggett & Platt, Inc.

      11,383       $ 550,937   

Lennar Corp., Class A

      18,642         901,527   

Newell Rubbermaid, Inc.

      62,919         2,786,683   
     

 

 

  
      $ 4,239,147   
     

 

 

  

Household Products — 1.9%

      

Clorox Co. (The)

      6,843       $ 862,629   

Kimberly-Clark Corp.

      19,850         2,670,023   

Procter & Gamble Co. (The)

      41,348         3,403,354   
     

 

 

  
      $ 6,936,006   
     

 

 

  

Industrial Conglomerates — 2.1%

      

3M Co.

      21,663       $ 3,609,706   

General Electric Co.

      139,360         4,430,254   
     

 

 

  
      $ 8,039,960   
     

 

 

  

Insurance — 4.1%

      

Allstate Corp. (The)

      44,623       $ 3,006,251   

AmTrust Financial Services, Inc.

      6,090         157,609   

Chubb, Ltd.

      12,980         1,546,567   

Cincinnati Financial Corp.

      18,908         1,235,827   

Lincoln National Corp.

      47,210         1,850,632   

Marsh & McLennan Cos., Inc.

      50,188         3,050,929   

MetLife, Inc.

      10,338         454,252   

Principal Financial Group, Inc.

      29,001         1,144,089   

Prudential Financial, Inc.

      17,013         1,228,679   

Travelers Cos., Inc. (The)

      13,969         1,630,322   
     

 

 

  
      $ 15,305,157   
     

 

 

  

 

3

 

 

                                                 
Security    Shares      Value  

Internet & Catalog Retail — 1.8%

      

Amazon.com, Inc.(1)

      5,031       $ 2,986,603   

Netflix, Inc.(1)

      4,333         442,963   

Priceline Group, Inc. (The)(1)

      1,797         2,316,261   

Shutterfly, Inc.(1)

      19,125         886,826   
     

 

 

  
      $ 6,632,653   
     

 

 

  

Internet Software & Services — 5.3%

      

Alphabet, Inc., Class A(1)

      8,610       $ 6,568,569   

Alphabet, Inc., Class C(1)

      8,633         6,431,153   

Facebook, Inc., Class A(1)

      37,484         4,276,925   

VeriSign, Inc.(1)

      29,713         2,630,789   
     

 

 

  
      $ 19,907,436   
     

 

 

  

IT Services — 3.0%

      

Fidelity National Information Services, Inc.

      26,132       $ 1,654,417   

International Business Machines Corp.

      26,401         3,998,431   

MasterCard, Inc., Class A

      47,447         4,483,741   

Visa, Inc., Class A

      15,270         1,167,850   
     

 

 

  
      $ 11,304,439   
     

 

 

  

Leisure Products — 0.0%(2)

      

Mattel, Inc.

      5,179       $ 174,118   
     

 

 

  
      $ 174,118   
     

 

 

  

Life Sciences Tools & Services — 1.0%

      

Thermo Fisher Scientific, Inc.

      25,979       $ 3,678,367   
     

 

 

  
      $ 3,678,367   
     

 

 

  

Machinery — 0.7%

      

Caterpillar, Inc.

      9,517       $ 728,431   

Snap-on, Inc.

      6,380         1,001,596   

Stanley Black & Decker, Inc.

      8,690         914,275   
     

 

 

  
      $ 2,644,302   
     

 

 

  

Media — 4.5%

      

CBS Corp., Class B

      20,142       $ 1,109,623   

Comcast Corp., Class A

      87,722         5,358,060   

Omnicom Group, Inc.

      35,123         2,923,287   

Time Warner, Inc.

      28,358         2,057,373   

Walt Disney Co. (The)

      55,841         5,545,569   
     

 

 

  
      $ 16,993,912   
     

 

 

  

Metals & Mining — 0.4%

      

Nucor Corp.

      27,934       $ 1,321,278   
     

 

 

  
      $ 1,321,278   
     

 

 

  

Multi-Utilities — 1.9%

      

Centerpoint Energy, Inc.

      14,223       $ 297,545   

CMS Energy Corp.

      65,445         2,777,486   

Dominion Resources, Inc.

      1,997         150,014   

DTE Energy Co.

      10,342         937,606   

NiSource, Inc.

      49,999         1,177,976   

Public Service Enterprise Group, Inc.

      36,355         1,713,775   
     

 

 

  
      $ 7,054,402   
     

 

 

  

Multiline Retail — 0.8%

      

Macy’s, Inc.

      48,228       $ 2,126,373   

Nordstrom, Inc.

      12,248         700,708   

Target Corp.

      2,425         199,529   
     

 

 

  
      $ 3,026,610   
     

 

 

  

Oil, Gas & Consumable Fuels — 6.1%

      

Chevron Corp.

      61,930       $ 5,908,122   

Columbia Pipeline Group, Inc.

      49,999         1,254,975   

EOG Resources, Inc.

      33,718         2,447,252   

Exxon Mobil Corp.

      65,566         5,480,662   

 

4

 

 

                                                 
Security    Shares      Value  

Kinder Morgan, Inc.

      35,957       $ 642,192   

Newfield Exploration Co.(1)

      74,168         2,466,086   

Phillips 66

      24,334         2,107,081   

Tesoro Corp.

      19,643         1,689,494   

Williams Cos., Inc. (The)

      57,536         924,604   
     

 

 

  
      $ 22,920,468   
     

 

 

  

Personal Products — 0.1%

      

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

      3,326       $ 313,675   
     

 

 

  
      $ 313,675   
     

 

 

  

Pharmaceuticals — 5.7%

      

Allergan PLC(1)

      1,596       $ 427,776   

Bristol-Myers Squibb Co.

      74,352         4,749,606   

Johnson & Johnson

      51,433         5,565,050   

Mallinckrodt PLC(1)

      10,438         639,641   

Merck & Co., Inc.

      105,937         5,605,127   

Pfizer, Inc.

      139,905         4,146,784   
     

 

 

  
      $ 21,133,984   
     

 

 

  

Professional Services — 0.3%

      

ManpowerGroup, Inc.

      1,193       $ 97,134   

Robert Half International, Inc.

      18,170         846,359   
     

 

 

  
      $ 943,493   
     

 

 

  

Real Estate Investment Trusts (REITs) — 2.5%

      

Apartment Investment & Management Co., Class A

      12,428       $ 519,739   

AvalonBay Communities, Inc.

      11,002         2,092,581   

Crown Castle International Corp.

      14,227         1,230,636   

Equity Residential

      14,774         1,108,493   

Host Hotels & Resorts, Inc.

      58,590         978,453   

Kimco Realty Corp.

      78,276         2,252,783   

ProLogis, Inc.

      22,296         985,037   

Realty Income Corp.

      4,920         307,549   
     

 

 

  
      $ 9,475,271   
     

 

 

  

Real Estate Management & Development — 0.1%

      

CBRE Group, Inc., Class A(1)

      8,158       $ 235,114   
     

 

 

  
      $ 235,114   
     

 

 

  

Road & Rail — 1.0%

      

J.B. Hunt Transport Services, Inc.

      3,521       $ 296,609   

Kansas City Southern

      11,539         986,008   

Norfolk Southern Corp.

      27,357         2,277,470   
     

 

 

  
      $ 3,560,087   
     

 

 

  

Semiconductors & Semiconductor Equipment — 2.8%

      

Analog Devices, Inc.

      16,160       $ 956,511   

Applied Materials, Inc.

      15,313         324,329   

Broadcom, Ltd.

      12,225         1,888,763   

Cree, Inc.(1)

      10,954         318,761   

Intel Corp.

      55,142         1,783,844   

KLA-Tencor Corp.

      3,859         280,974   

NVIDIA Corp.

      24,772         882,626   

QUALCOMM, Inc.

      67,609         3,457,524   

Teradyne, Inc.

      32,470         701,027   
     

 

 

  
      $ 10,594,359   
     

 

 

  

Software — 4.2%

      

Electronic Arts, Inc.(1)

      7,140       $ 472,026   

Microsoft Corp.

      196,258         10,839,329   

Oracle Corp.

      103,117         4,218,517   

salesforce.com, inc.(1)

      4,316         318,650   
     

 

 

  
      $ 15,848,522   
     

 

 

  

 

5

 

 

                                                 
Security    Shares      Value  

Specialty Retail — 2.3%

      

Advance Auto Parts, Inc.

      3,365       $ 539,544   

Home Depot, Inc. (The)

      45,616         6,086,543   

L Brands, Inc.

      1,800         158,058   

Lowe’s Cos., Inc.

      9,090         688,567   

Tiffany & Co.

      14,641         1,074,357   
     

 

 

  
      $ 8,547,069   
     

 

 

  

Technology Hardware, Storage & Peripherals — 4.1%

      

Apple, Inc.

      140,788       $ 15,344,484   
     

 

 

  
      $ 15,344,484   
     

 

 

  

Textiles, Apparel & Luxury Goods — 1.0%

      

Coach, Inc.

      26,269       $ 1,053,124   

Michael Kors Holdings, Ltd.(1)

      4,705         267,997   

NIKE, Inc., Class B

      31,994         1,966,671   

Under Armour, Inc., Class A(1)

      4,145         351,621   
     

 

 

  
      $ 3,639,413   
     

 

 

  

Tobacco — 1.7%

      

Altria Group, Inc.

      10,537       $ 660,248   

Philip Morris International, Inc.

      57,916         5,682,139   

Reynolds American, Inc.

      3,120         156,967   
     

 

 

  
      $ 6,499,354   
     

 

 

  

Trading Companies & Distributors — 0.1%

      

Fastenal Co.

      10,080       $ 493,920   
     

 

 

  
      $ 493,920   
     

 

 

  

Total Common Stocks — 101.8%
(identified cost $166,850,806)

       $ 380,386,534   
     

 

 

  

Call Options Written — (1.9)%

      

 

                                                                                                   
Description    Number of
Contracts		      Strike
Price		      Expiration
Date		      Value  

S&P 500 Index

      565       $ 2,010         4/1/16       $ (2,810,875 ) 

S&P 500 Index

      315         2,025         4/8/16         (1,192,275 ) 

S&P 500 Index

      485         2,040         4/15/16         (1,467,125 ) 

S&P 500 Index

      420         2,040         4/22/16         (1,474,200 ) 
           

 

 

  

Total Call Options Written
(premiums received $4,692,014)

             $ (6,944,475 ) 
           

 

 

  

Other Assets, Less Liabilities — 0.1%

             $ 377,123   
           

 

 

  

Net Assets — 100.0%

             $ 373,819,182   
           

 

 

  

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

 

(1) Non-income producing security.

 

(2) Amount is less than 0.05%.

Written options activity for the fiscal year to date ended March 31, 2016 was as follows:

 

     Number of
Contracts		      Premiums
Received		  
Outstanding, beginning of period      1,780       $ 3,500,938   
Options written      5,315         13,377,487   
Options terminated in closing purchase transactions      (2,190 )       (5,521,620 ) 
Options expired      (3,120 )       (6,664,791 ) 
  

 

 

     

 

 

  
Outstanding, end of period      1,785       $     4,692,014   
  

 

 

     

 

 

  

 

6

 

 

All of the assets of the Fund are subject to segregation to satisfy the requirements of the escrow agent. At March 31, 2016, 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 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, 2016, 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 $6,944,475.

The cost and unrealized appreciation (depreciation) of investments of the Fund at March 31, 2016, as determined on a federal income tax basis, were as follows:

 

Aggregate cost

    $     166,663,696   
  

 

 

  

Gross unrealized appreciation

    $ 213,748,268   

Gross unrealized depreciation

      (25,430 ) 
  

 

 

  

Net unrealized appreciation

    $ 213,722,838   
  

 

 

  

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)

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, 2016, 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

    $ 380,386,534 *     $ —       $ —       $ 380,386,534   

Total Investments

    $     380,386,534       $     —       $     —       $     380,386,534   
Liability Description                                

Call Options Written

    $ (6,944,475 )     $ —       $ —       $ (6,944,475 ) 

Total

    $ (6,944,475 )     $ —       $ —       $ (6,944,475 ) 

 

* 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, 2015 whose fair value was determined using Level 3 inputs. At March 31, 2016, 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.

 

7

 

 

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/ Michael A. Allison
  Michael A. Allison
  President
Date:   May 23, 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:   May 23, 2016
By:   /s/ James F. Kirchner
  James F. Kirchner
  Treasurer
Date:   May 23, 2016