Eaton Vance Tax-Managed Buy-Write Income Fund Offers 8.5% Yield and 7% Discount

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Eaton Vance Tax-Managed Buy-Write Income Fund (ETB) is a closed-end fund launched in 2005 with a primary objective of providing a high level of tax-managed income. The fund seeks to minimize tax liabilities by using a consistent buy-write options strategy, offering an 8.5% yield and a 7% discount. ETB aims to generate income and long-term capital appreciation while maintaining a stable dividend payout.

Eaton Vance Tax-Managed Buy-Write Income Fund (NYSE: ETB), launched in April 2005, is a closed-end fund with a primary objective of providing high tax-managed income. The fund aims to minimize federal income taxes for its shareholders while also seeking capital appreciation as a secondary objective. ETB currently offers a distribution yield of approximately 8.5%, with the market price providing a 7% discount to the net asset value (NAV).

ETB employs a buy-write options strategy, investing in a diversified portfolio of common stocks and selling covered call options to generate income and reduce volatility. The fund uses no leverage and is primarily invested in domestic US securities, with a high concentration in technology stocks. Over its 20-year existence, ETB has navigated various market environments, including the 2008-2009 financial crisis, ZIRP (Zero Interest Rate Period), the COVID-19 pandemic, and the recent high inflation and rising interest rate environment.

The fund's performance over the past decade has been notable, with annualized returns of 9.20% over 10 years, 11.60% over 5 years, and 14.65% over 3 years, assuming all distributions were reinvested. As of September 30, 2025, the fund's total net assets amounted to $471.4 million, with an expense ratio of 1.11%, including 1.0% of management fees.

ETB's distribution policy is characterized as 'managed,' meaning it may not always earn enough in investment income and capital gains to pay distributions. Instead, it may pay some of the distribution as ROC (return of capital), which is tax-efficient. The fund currently pays a monthly distribution of $0.1058 per share, yielding 8.5% on current prices and 7.93% on the NAV.

The fund's top 10 holdings, as of June 30, 2025, include NVIDIA (NVDA), Microsoft (MSFT), Apple (AAPL), Amazon (AMZN), Meta Platforms (META), Broadcom (AVGO), Alphabet (GOOGL), Berkshire Hathaway (BRK.B), and JPMorgan Chase (JPM). The fund's performance relative to the S&P 500 has been mixed, with the fund underperforming the index over the past decade but managing to outperform its benchmark.

In conclusion, Eaton Vance Tax-Managed Buy-Write Income Fund (ETB) offers an attractive yield and discount, making it an appealing option for income investors seeking tax-efficient returns. However, investors should be aware of the fund's managed distribution policy and the potential for ROC distributions.

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