UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act File Number: 811-22269
Eaton Vance National Municipal Opportunities Trust
(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)
March 31
Date of Fiscal Year End
September 30, 2013
Date of Reporting Period
Item 1. Reports to Stockholders
Eaton Vance
National Municipal
Opportunities Trust (EOT)
Semiannual Report
September 30, 2013
Commodity Futures Trading Commission Registration. Effective December 31, 2012, the Commodity Futures Trading Commission (“CFTC”) adopted certain regulatory changes that subject registered investment companies and advisers to regulation by the CFTC if a fund invests more than a prescribed level of its assets in certain CFTC-regulated instruments (including futures, certain options and swap agreements) or markets itself as providing investment exposure to such instruments. The Fund has claimed an exclusion from the definition of the term “commodity pool operator” under the Commodity Exchange Act and is not subject to the CFTC regulation. Because of its management of other strategies, the Fund’s adviser is registered with the CFTC as a commodity pool operator.
Fund shares are not insured by the FDIC and are not deposits or other obligations of, or guaranteed by, any depository institution. Shares are subject to investment risks, including possible loss of principal invested.
Semiannual Report September 30, 2013
Eaton Vance
National Municipal Opportunities Trust
Table of Contents
| Performance |
2 | |||
| Fund Profile |
2 | |||
| Endnotes and Additional Disclosures |
3 | |||
| Financial Statements |
4 | |||
| Board of Trustees’ Contract Approval |
17 | |||
| Officers and Trustees |
20 | |||
| Important Notices |
21 | |||
Eaton Vance
National Municipal Opportunities Trust
September 30, 2013
Performance1,2
Portfolio Managers Cynthia J. Clemson and Thomas M. Metzold, CFA
| % Average Annual Total Returns | Inception Date | Six Months | One Year | Five Years | Since Inception |
|||||||||||||||
| Fund at NAV |
05/29/2009 | –6.32 | % | –4.26 | % | — | 7.94 | % | ||||||||||||
| Fund at Market Price |
— | –13.29 | –14.71 | — | 5.55 | |||||||||||||||
| Barclays Long (22+) Year Municipal Bond Index |
— | –6.41 | % | –5.06 | % | 7.24 | % | 6.52 | % | |||||||||||
| % Premium/Discount to NAV3 | ||||||||||||||||||||
| –9.27 | % | |||||||||||||||||||
| Distributions4 | ||||||||||||||||||||
| Total Distributions per share for the period |
$ | 0.515 | ||||||||||||||||||
| Distribution Rate at NAV |
4.97 | % | ||||||||||||||||||
| Taxable-Equivalent Distribution Rate at NAV |
8.78 | % | ||||||||||||||||||
| Distribution Rate at Market Price |
5.48 | % | ||||||||||||||||||
| Taxable-Equivalent Distribution Rate at Market Price |
9.68 | % | ||||||||||||||||||
| % Total Leverage5 | ||||||||||||||||||||
| Residual Interest Bond (RIB) |
13.39 | % | ||||||||||||||||||
Fund Profile
The above chart includes the ratings of securities held by special purpose vehicles established in connection with the RIB financing.5 Absent such securities, credit quality (% of total investments) is as follows:6
| AAA |
3.3 | % | BB |
3.2 | % | |||||
| AA |
26.2 | B |
7.0 | |||||||
| A |
32.5 | Not Rated |
2.4 | |||||||
| BBB |
25.4 |
See Endnotes and Additional Disclosures in this report.
Past performance is no guarantee of future results. Returns are historical and are calculated by determining the percentage change in net asset value (NAV) or market price (as applicable) with all distributions reinvested and includes management fees and other expenses. Fund performance at market price will differ from its results at NAV due to factors such as changing perceptions about the Fund, market conditions, fluctuations in supply and demand for Fund shares, or changes in Fund distributions. Investment return and principal value will fluctuate so that shares, when sold, may be worth more or less than their original cost. Performance less than one year is cumulative. Performance is for the stated time period only; due to market volatility, current Fund performance may be lower or higher than the quoted return. For performance as of the most recent month end, please refer to www.eatonvance.com.
| 2 |
Eaton Vance
National Municipal Opportunities Trust
September 30, 2013
Endnotes and Additional Disclosures
| 3 |
Eaton Vance
National Municipal Opportunities Trust
September 30, 2013
Portfolio of Investments (Unaudited)
| 4 | See Notes to Financial Statements. |
Eaton Vance
National Municipal Opportunities Trust
September 30, 2013
Portfolio of Investments (Unaudited) — continued
| 5 | See Notes to Financial Statements. |
Eaton Vance
National Municipal Opportunities Trust
September 30, 2013
Portfolio of Investments (Unaudited) — continued
| 6 | See Notes to Financial Statements. |
Eaton Vance
National Municipal Opportunities Trust
September 30, 2013
Portfolio of Investments (Unaudited) — continued
| 7 | See Notes to Financial Statements. |
Eaton Vance
National Municipal Opportunities Trust
September 30, 2013
Statement of Assets and Liabilities (Unaudited)
| Assets | September 30, 2013 | |||
| Investments, at value (identified cost, $328,825,440) |
$ | 360,330,956 | ||
| Cash |
893,096 | |||
| Interest receivable |
5,530,879 | |||
| Receivable for investments sold |
35,128 | |||
| Total assets |
$ | 366,790,059 | ||
| Liabilities | ||||
| Payable for floating rate notes issued |
$ | 49,050,000 | ||
| Payable to affiliates: |
||||
| Investment adviser and administration fee |
178,841 | |||
| Interest expense and fees payable |
94,303 | |||
| Accrued expenses |
90,810 | |||
| Total liabilities |
$ | 49,413,954 | ||
| Net Assets |
$ | 317,376,105 | ||
| Sources of Net Assets | ||||
| Common shares, $0.01 par value, unlimited number of shares authorized |
$ | 153,283 | ||
| Additional paid-in capital |
292,266,684 | |||
| Accumulated net realized loss |
(7,280,932 | ) | ||
| Accumulated undistributed net investment income |
731,554 | |||
| Net unrealized appreciation |
31,505,516 | |||
| Net Assets |
$ | 317,376,105 | ||
| Common Shares Outstanding | 15,328,333 | |||
| Net Asset Value | ||||
| Net assets ÷ common shares issued and outstanding |
$ | 20.71 | ||
| 8 | See Notes to Financial Statements. |
Eaton Vance
National Municipal Opportunities Trust
September 30, 2013
Statement of Operations (Unaudited)
| Investment Income | Six Months Ended September 30, 2013 |
|||
| Interest |
$ | 9,957,336 | ||
| Total investment income |
$ | 9,957,336 | ||
| Expenses | ||||
| Investment adviser and administration fee |
$ | 1,142,090 | ||
| Trustees’ fees and expenses |
7,736 | |||
| Custodian fee |
78,926 | |||
| Transfer and dividend disbursing agent fees |
9,002 | |||
| Legal and accounting services |
32,886 | |||
| Printing and postage |
16,068 | |||
| Interest expense and fees |
190,285 | |||
| Miscellaneous |
41,495 | |||
| Total expenses |
$ | 1,518,488 | ||
| Deduct — |
||||
| Reduction of custodian fee |
$ | 741 | ||
| Total expense reductions |
$ | 741 | ||
| Net expenses |
$ | 1,517,747 | ||
| Net investment income |
$ | 8,439,589 | ||
| Realized and Unrealized Gain (Loss) | ||||
| Net realized gain (loss) — |
||||
| Investment transactions |
$ | (1,249,736 | ) | |
| Financial futures contracts |
(775,684 | ) | ||
| Net realized loss |
$ | (2,025,420 | ) | |
| Change in unrealized appreciation (depreciation) — |
||||
| Investments |
$ | (29,493,442 | ) | |
| Financial futures contracts |
463,025 | |||
| Net change in unrealized appreciation (depreciation) |
$ | (29,030,417 | ) | |
| Net realized and unrealized loss |
$ | (31,055,837 | ) | |
| Net decrease in net assets from operations |
$ | (22,616,248 | ) | |
| 9 | See Notes to Financial Statements. |
Eaton Vance
National Municipal Opportunities Trust
September 30, 2013
Statements of Changes in Net Assets
| Increase (Decrease) in Net Assets | Six Months Ended September 30, 2013 (Unaudited) |
Year Ended March 31, 2013 |
||||||
| From operations — |
||||||||
| Net investment income |
$ | 8,439,589 | $ | 16,947,819 | ||||
| Net realized gain (loss) from investment transactions and financial futures contracts |
(2,025,420 | ) | 2,066,011 | |||||
| Net change in unrealized appreciation (depreciation) from investments and financial futures contracts |
(29,030,417 | ) | 13,679,834 | |||||
| Net increase (decrease) in net assets from operations |
$ | (22,616,248 | ) | $ | 32,693,664 | |||
| Distributions to shareholders — |
||||||||
| From net investment income |
$ | (7,894,153 | ) | $ | (16,469,934 | ) | ||
| Total distributions to shareholders |
$ | (7,894,153 | ) | $ | (16,469,934 | ) | ||
| Capital share transactions — |
||||||||
| Reinvestment of distributions |
$ | — | $ | 428,753 | ||||
| Net increase in net assets from capital share transactions |
$ | — | $ | 428,753 | ||||
| Net increase (decrease) in net assets |
$ | (30,510,401 | ) | $ | 16,652,483 | |||
| Net Assets | ||||||||
| At beginning of period |
$ | 347,886,506 | $ | 331,234,023 | ||||
| At end of period |
$ | 317,376,105 | $ | 347,886,506 | ||||
| Accumulated undistributed net investment income included in net assets |
||||||||
| At end of period |
$ | 731,554 | $ | 186,118 | ||||
| 10 | See Notes to Financial Statements. |
Eaton Vance
National Municipal Opportunities Trust
September 30, 2013
Statement of Cash Flows (Unaudited)
| Cash Flows From Operating Activities | Six Months Ended September 30, 2013 |
|||
| Net decrease in net assets from operations |
$ | (22,616,248 | ) | |
| Adjustments to reconcile net decrease in net assets from operations to net cash provided by operating activities: |
||||
| Investments purchased |
(30,471,854 | ) | ||
| Investments sold |
30,555,156 | |||
| Net amortization/accretion of premium (discount) |
(965,482 | ) | ||
| Decrease in restricted cash |
625,000 | |||
| Decrease in interest receivable |
19,055 | |||
| Decrease in receivable for variation margin on open financial futures contracts |
36,328 | |||
| Decrease in payable to affiliate for investment adviser and administration fee |
(21,465 | ) | ||
| Increase in interest expense and fees payable |
9,986 | |||
| Increase in accrued expenses |
1,623 | |||
| Net change in unrealized (appreciation) depreciation from investments |
29,493,442 | |||
| Net realized loss from investments |
1,249,736 | |||
| Net cash provided by operating activities |
$ | 7,915,277 | ||
| Cash Flows From Financing Activities | ||||
| Distributions paid, net of reinvestments |
$ | (7,894,153 | ) | |
| Proceeds from secured borrowings |
6,390,000 | |||
| Repayment of secured borrowings |
(8,320,000 | ) | ||
| Net cash used in financing activities |
$ | (9,824,153 | ) | |
| Net decrease in cash |
$ | (1,908,876 | ) | |
| Cash at beginning of period |
$ | 2,801,972 | ||
| Cash at end of period |
$ | 893,096 | ||
| Supplemental disclosure of cash flow information: | ||||
| Cash paid for interest and fees |
$ | 180,299 | ||
| 11 | See Notes to Financial Statements. |
Eaton Vance
National Municipal Opportunities Trust
September 30, 2013
Financial Highlights
| Six Months Ended September 30, 2013 (Unaudited) |
Year Ended March 31, 2013 |
Year Ended March 31, 2012 |
Year Ended March 31, 2011 |
Period Ended March 31, 2010(1) |
||||||||||||||||
| Net asset value — Beginning of period |
$ | 22.700 | $ | 21.640 | $ | 19.320 | $ | 21.230 | $ | 19.100 | (2) | |||||||||
| Income (Loss) From Operations | ||||||||||||||||||||
| Net investment income(3) |
$ | 0.551 | $ | 1.106 | $ | 1.174 | $ | 1.273 | $ | 1.007 | ||||||||||
| Net realized and unrealized gain (loss) |
(2.026 | ) | 1.029 | 2.309 | (1.818 | ) | 2.164 | |||||||||||||
| Total income (loss) from operations |
$ | (1.475 | ) | $ | 2.135 | $ | 3.483 | $ | (0.545 | ) | $ | 3.171 | ||||||||
| Less Distributions | ||||||||||||||||||||
| From net investment income |
$ | (0.515 | ) | $ | (1.075 | ) | $ | (1.163 | ) | $ | (1.240 | ) | $ | (0.930 | ) | |||||
| From net realized gain |
— | — | — | (0.125 | ) | (0.079 | ) | |||||||||||||
| Total distributions |
$ | (0.515 | ) | $ | (1.075 | ) | $ | (1.163 | ) | $ | (1.365 | ) | $ | (1.009 | ) | |||||
| Offering costs charged to paid-in capital(3) |
$ | — | $ | — | $ | — | $ | — | $ | (0.032 | ) | |||||||||
| Net asset value — End of period |
$ | 20.710 | $ | 22.700 | $ | 21.640 | $ | 19.320 | $ | 21.230 | ||||||||||
| Market Value — End of period |
$ | 18.790 | $ | 22.250 | $ | 21.800 | $ | 18.630 | $ | 20.260 | ||||||||||
| Total Investment Return on Net Asset Value(4) |
(6.32 | )%(5) | 10.03 | % | 18.67 | % | (2.61 | )% | 16.96 | %(5)(6) | ||||||||||
| Total Investment Return on Market Value(4) |
(13.29 | )%(5) | 7.06 | % | 23.98 | % | (1.60 | )% | 11.62 | %(5)(6) | ||||||||||
| Ratios/Supplemental Data | ||||||||||||||||||||
| Net assets, end of period (000’s omitted) |
$ | 317,376 | $ | 347,887 | $ | 331,234 | $ | 295,495 | $ | 324,328 | ||||||||||
| Ratios (as a percentage of average daily net assets): |
||||||||||||||||||||
| Expenses excluding interest and fees(7) |
0.80 | %(8) | 0.78 | % | 0.80 | % | 0.81 | % | 0.82 | %(8) | ||||||||||
| Interest and fee expense(9) |
0.12 | %(8) | 0.10 | % | 0.11 | % | 0.13 | % | 0.12 | %(8) | ||||||||||
| Total expenses(7) |
0.92 | %(8) | 0.88 | % | 0.91 | % | 0.94 | % | 0.94 | %(8) | ||||||||||
| Net investment income |
5.11 | %(8) | 4.90 | % | 5.70 | % | 6.08 | % | 5.84 | %(8) | ||||||||||
| Portfolio Turnover |
7 | %(5) | 14 | % | 10 | % | 10 | % | 18 | %(5) | ||||||||||
| (1) | For the period from the start of business, May 29, 2009, to March 31, 2010. |
| (2) | Net asset value at beginning of period reflects the deduction of the sales load of $0.90 per share paid by the shareholder from the $20.00 offering price. |
| (3) | Computed using average shares outstanding. |
| (4) | Returns are historical and are calculated by determining the percentage change in net asset value or market value with all distributions reinvested. Distributions are assumed to be reinvested at prices obtained under the Trust’s dividend reinvestment plan. |
| (5) | Not annualized. |
| (6) | Total investment return on net asset value is calculated assuming a purchase at the offering price of $20.00 less the sales load of $0.90 per share paid by the shareholder on the first day and a sale at the net asset value on the last day of the period reported with all distributions reinvested. Total investment return on market value is calculated assuming a purchase at the offering price of $20.00 less the sales load of $0.90 per share paid by the shareholder on the first day and a sale at the current market price on the last day of the period reported with all distributions reinvested. |
| (7) | Excludes the effect of custody fee credits, if any, of less than 0.005%. |
| (8) | Annualized. |
| (9) | Interest and fee expense relates to the liability for floating rate notes issued in conjunction with residual interest bond transactions (see Note 1H). |
| 12 | See Notes to Financial Statements. |
Eaton Vance
National Municipal Opportunities Trust
September 30, 2013
Notes to Financial Statements (Unaudited)
1 Significant Accounting Policies
Eaton Vance National Municipal Opportunities Trust (the Trust) is a Massachusetts business trust registered under the Investment Company Act of 1940, as amended (the 1940 Act), as a diversified, closed-end management investment company. The Trust’s primary investment objective is to provide current income exempt from regular federal income tax. The Trust will, as a secondary investment objective, seek to achieve capital appreciation.
The following is a summary of significant accounting policies of the Trust. The policies are in conformity with accounting principles generally accepted in the United States of America.
A Investment Valuation — The following methodologies are used to determine the market value or fair value of investments.
Debt Obligations. Debt obligations (including short-term obligations with a remaining maturity of more than sixty days) are generally valued on the basis of valuations provided by third party pricing services, as derived from such services’ pricing models. Inputs to the models may include, but are not limited to, reported trades, executable bid and asked prices, broker/dealer quotations, prices or yields of securities with similar characteristics, benchmark curves or information pertaining to the issuer, as well as industry and economic events. The pricing services may use a matrix approach, which considers information regarding securities with similar characteristics to determine the valuation for a security. Short-term obligations purchased with a remaining maturity of sixty days or less are generally valued at amortized cost, which approximates market value.
Derivatives. Financial futures contracts are valued at the closing settlement price established by the board of trade or exchange on which they are traded.
Fair Valuation. Investments for which valuations or market quotations are not readily available or are deemed unreliable are valued at fair value using methods determined in good faith by or at the direction of the Trustees of the Trust in a manner that fairly reflects the security’s value, or the amount that the Trust might reasonably expect to receive for the security upon its current sale in the ordinary course. Each such determination is based on a consideration of relevant factors, which are likely to vary from one pricing context to another. These factors may include, but are not limited to, the type of security, the existence of any contractual restrictions on the security’s disposition, the price and extent of public trading in similar securities of the issuer or of comparable companies or entities, quotations or relevant information obtained from broker/dealers or other market participants, information obtained from the issuer, analysts, and/or the appropriate stock exchange (for exchange-traded securities), an analysis of the entity’s financial condition, and an evaluation of the forces that influence the issuer and the market(s) in which the security is purchased and sold.
B Investment Transactions and Related Income — Investment transactions for financial statement purposes are accounted for on a trade date basis. Realized gains and losses on investments sold are determined on the basis of identified cost. Interest income is recorded on the basis of interest accrued, adjusted for amortization of premium or accretion of discount.
C Federal Taxes — The Trust’s policy is to comply with the provisions of the Internal Revenue Code applicable to regulated investment companies and to distribute to shareholders each year substantially all of its taxable, if any, and tax-exempt net investment income, and all or substantially all of its net realized capital gains. Accordingly, no provision for federal income or excise tax is necessary. The Trust intends to satisfy conditions which will enable it to designate distributions from the interest income generated by its investments in municipal obligations, which are exempt from regular federal income tax when received by the Trust, as exempt-interest dividends. The portion of such interest, if any, earned on private activity bonds issued after August 7, 1986, may be considered a tax preference item to shareholders.
At March 31, 2013, the Trust, for federal income tax purposes, had deferred capital losses of $7,199,206 which will reduce its taxable income arising from future net realized gains on investment transactions, if any, to the extent permitted by the Internal Revenue Code, and thus will reduce the amount of distributions to shareholders, which would otherwise be necessary to relieve the Trust of any liability for federal income or excise tax. The deferred capital losses are treated as arising on the first day of the Trust’s next taxable year.
As of September 30, 2013, the Trust had no uncertain tax positions that would require financial statement recognition, de-recognition, or disclosure. The Trust files a U.S. federal income tax return annually after its fiscal year-end, which is subject to examination by the Internal Revenue Service for a period of three years from the date of filing.
D Expense Reduction — State Street Bank and Trust Company (SSBT) serves as custodian of the Trust. Pursuant to the custodian agreement, SSBT receives a fee reduced by credits, which are determined based on the average daily cash balance the Trust maintains with SSBT. All credit balances, if any, used to reduce the Trust’s custodian fees are reported as a reduction of expenses in the Statement of Operations.
E Legal Fees — Legal fees and other related expenses incurred as part of negotiations of the terms and requirement of capital infusions, or that are expected to result in the restructuring of, or a plan of reorganization for, an investment are recorded as realized losses. Ongoing expenditures to protect or enhance an investment are treated as operating expenses.
F Use of Estimates — The preparation of the financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of income and expense during the reporting period. Actual results could differ from those estimates.
G Indemnifications — Under the Trust’s organizational documents, its officers and Trustees may be indemnified against certain liabilities and expenses arising out of the performance of their duties to the Trust. Under Massachusetts law, if certain conditions prevail, shareholders of a Massachusetts business
| 13 |
Eaton Vance
National Municipal Opportunities Trust
September 30, 2013
Notes to Financial Statements (Unaudited) — continued
trust (such as the Trust) could be deemed to have personal liability for the obligations of the Trust. However, the Trust’s Declaration of Trust contains an express disclaimer of liability on the part of Trust shareholders and the By-laws provide that the Trust shall assume the defense on behalf of any Trust shareholders. Moreover, the By-laws also provide for indemnification out of Trust property of any shareholder held personally liable solely by reason of being or having been a shareholder for all loss or expense arising from such liability. Additionally, in the normal course of business, the Trust enters into agreements with service providers that may contain indemnification clauses. The Trust’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Trust that have not yet occurred.
H Floating Rate Notes Issued in Conjunction with Securities Held — The Trust may invest in residual interest bonds, also referred to as inverse floating rate securities, whereby the Trust may sell a variable or fixed rate bond to a broker for cash. At the same time, the Trust buys a residual interest in the assets and cash flows of a Special-Purpose Vehicle (the SPV), (which is generally organized as a trust), set up by the broker. The broker deposits a bond into the SPV with the same CUSIP number as the bond sold to the broker by the Trust, and which may have been, but is not required to be, the bond purchased from the Trust (the Bond). The SPV also issues floating rate notes (Floating Rate Notes) which are sold to third-parties. The residual interest bond held by the Trust gives the Trust the right (1) to cause the holders of the Floating Rate Notes to generally tender their notes at par, and (2) to have the broker transfer the Bond held by the SPV to the Trust, thereby terminating the SPV. Should the Trust exercise such right, it would generally pay the broker the par amount due on the Floating Rate Notes and exchange the residual interest bond for the underlying Bond. Pursuant to generally accepted accounting principles for transfers and servicing of financial assets and extinguishment of liabilities, the Trust accounts for the transaction described above as a secured borrowing by including the Bond in its Portfolio of Investments and the Floating Rate Notes as a liability under the caption “Payable for floating rate notes issued” in its Statement of Assets and Liabilities. The Floating Rate Notes have interest rates that generally reset weekly and their holders have the option to tender their notes to the broker for redemption at par at each reset date. Accordingly, the fair value of the payable for floating rate notes issued approximates its carrying value. If measured at fair value, the payable for floating rate notes would have been considered as Level 2 in the fair value hierarchy (see Note 8) at September 30, 2013. Interest expense related to the Trust’s liability with respect to Floating Rate Notes is recorded as incurred. The SPV may be terminated by the Trust, as noted above, or by the broker upon the occurrence of certain termination events as defined in the trust agreement, such as a downgrade in the credit quality of the underlying Bond, bankruptcy of or payment failure by the issuer of the underlying Bond, the inability to remarket Floating Rate Notes that have been tendered due to insufficient buyers in the market, or the failure by the SPV to obtain renewal of the liquidity agreement under which liquidity support is provided for the Floating Rate Notes up to one year. At September 30, 2013, the amount of the Trust’s Floating Rate Notes outstanding and the related collateral were $49,050,000 and $76,640,684, respectively. The range of interest rates on the Floating Rate Notes outstanding at September 30, 2013 was 0.07% to 0.13%. For the six months ended September 30, 2013, the Trust’s average Floating Rate Notes outstanding and the average interest rate including fees were $50,211,885 and 0.76% (annualized), respectively.
The Trust may enter into shortfall and forbearance agreements with the broker by which the Trust agrees to reimburse the broker, in certain circumstances, for the difference between the liquidation value of the Bond held by the SPV and the liquidation value of the Floating Rate Notes, as well as any shortfalls in interest cash flows. The Trust had no shortfalls as of September 30, 2013.
The Trust may also purchase residual interest bonds from brokers in a secondary market transaction without first owning the underlying bond. Such transactions are not required to be treated as secured borrowings. Shortfall agreements, if any, related to residual interest bonds purchased in a secondary market transaction are disclosed in the Portfolio of Investments.
The Trust’s investment policies and restrictions expressly permit investments in residual interest bonds. Such bonds typically offer the potential for yields exceeding the yields available on fixed rate bonds with comparable credit quality and maturity. These securities tend to underperform the market for fixed rate bonds in a rising long-term interest rate environment, but tend to outperform the market for fixed rate bonds when long-term interest rates decline. The value and income of residual interest bonds are generally more volatile than that of a fixed rate bond. The Trust’s investment policies do not allow the Trust to borrow money except as permitted by the 1940 Act. Management believes that the Trust’s restrictions on borrowing money and issuing senior securities (other than as specifically permitted) do not apply to Floating Rate Notes issued by the SPV and included as a liability in the Trust’s Statement of Assets and Liabilities. As secured indebtedness issued by an SPV, Floating Rate Notes are distinct from the borrowings and senior securities to which the Trust’s restrictions apply. Residual interest bonds held by the Trust are securities exempt from registration under Rule 144A of the Securities Act of 1933.
I Financial Futures Contracts — Upon entering into a financial futures contract, the Trust is required to deposit with the broker, either in cash or securities, an amount equal to a certain percentage of the contract amount (initial margin). Subsequent payments, known as variation margin, are made or received by the Trust each business day, depending on the daily fluctuations in the value of the underlying security, and are recorded as unrealized gains or losses by the Trust. Gains (losses) are realized upon the expiration or closing of the financial futures contracts. Should market conditions change unexpectedly, the Trust may not achieve the anticipated benefits of the financial futures contracts and may realize a loss. Futures contracts have minimal counterparty risk as they are exchange traded and the clearinghouse for the exchange is substituted as the counterparty, guaranteeing counterparty performance.
J When-Issued Securities and Delayed Delivery Transactions — The Trust may purchase or sell securities on a delayed delivery or when-issued basis. Payment and delivery may take place after the customary settlement period for that security. At the time the transaction is negotiated, the price of the security that will be delivered is fixed. The Trust maintains security positions for these commitments such that sufficient liquid assets will be available to make payments upon settlement. Securities purchased on a delayed delivery or when-issued basis are marked-to-market daily and begin earning interest on settlement date. Losses may arise due to changes in the market value of the underlying securities or if the counterparty does not perform under the contract.
| 14 |
Eaton Vance
National Municipal Opportunities Trust
September 30, 2013
Notes to Financial Statements (Unaudited) — continued
K Statement of Cash Flows — The cash amount shown in the Statement of Cash Flows of the Trust is the amount included in the Trust’s Statement of Assets and Liabilities and represents the unrestricted cash on hand at its custodian and does not include any short-term investments.
L Interim Financial Statements — The interim financial statements relating to September 30, 2013 and for the six months then ended have not been audited by an independent registered public accounting firm, but in the opinion of the Trust’s management, reflect all adjustments, consisting only of normal recurring adjustments, necessary for the fair presentation of the financial statements.
2 Distributions to Shareholders
The Trust intends to make monthly distributions of net investment income to common shareholders. In addition, at least annually, the Trust intends to distribute all or substantially all of its net realized capital gains. Distributions are recorded on the ex-dividend date. The Trust distinguishes between distributions on a tax basis and a financial reporting basis. Accounting principles generally accepted in the United States of America require that only distributions in excess of tax basis earnings and profits be reported in the financial statements as a return of capital. Permanent differences between book and tax accounting relating to distributions are reclassified to paid-in capital. For tax purposes, distributions from short-term capital gains are considered to be from ordinary income.
3 Investment Adviser and Administration Fee and Other Transactions with Affiliates
The investment adviser and administration fee is earned by Eaton Vance Management (EVM) as compensation for investment advisory and administrative services rendered to the Trust. The fee is computed at an annual rate of 0.60% of the Trust’s average daily gross assets up to $1.5 billion and 0.59% of average daily gross assets of $1.5 billion or more, and is payable monthly. Average daily gross assets include the principal amount of any indebtedness for money borrowed, including debt securities issued by the Trust. Average daily gross assets are calculated by adding to net assets the amount payable by the Trust to floating rate note holders. For the six months ended September 30, 2013, the investment adviser and administration fee incurred by the Trust and the effective annual rate, as a percentage of average daily gross assets, were $1,142,090 and 0.60%, respectively.
Trustees and officers of the Trust who are members of EVM’s organization receive remuneration for their services to the Trust out of the investment adviser and administration fee. Trustees of the Trust who are not affiliated with the investment adviser may elect to defer receipt of all or a percentage of their annual fees in accordance with the terms of the Trustees Deferred Compensation Plan. For the six months ended September 30, 2013, no significant amounts have been deferred. Certain officers and Trustees of the Trust are officers of EVM.
4 Purchases and Sales of Investments
Purchases and sales of investments, other than short-term obligations, aggregated $27,851,686 and $30,590,284, respectively, for the six months ended September 30, 2013.
5 Common Shares of Beneficial Interest
The Trust may issue common shares pursuant to its dividend reinvestment plan. There were no transactions in common shares by the Trust for the six months ended September 30, 2013. Common shares issued by the Trust pursuant to its dividend reinvestment plan for the year ended March 31, 2013 were 19,082.
6 Federal Income Tax Basis of Investments
The cost and unrealized appreciation (depreciation) of investments of the Trust at September 30, 2013, as determined on a federal income tax basis, were as follows:
| Aggregate cost |
$ | 278,151,809 | ||
| Gross unrealized appreciation |
$ | 35,936,831 | ||
| Gross unrealized depreciation |
(2,807,684 | ) | ||
| Net unrealized appreciation |
$ | 33,129,147 | ||
| 15 |
Eaton Vance
National Municipal Opportunities Trust
September 30, 2013
Notes to Financial Statements (Unaudited) — continued
7 Financial Instruments
The Trust may trade in financial instruments with off-balance sheet risk in the normal course of its investing activities. These financial instruments may include financial futures contracts and may involve, to a varying degree, elements of risk in excess of the amounts recognized for financial statement purposes. The notional or contractual amounts of these instruments represent the investment the Trust has in particular classes of financial instruments and do not necessarily represent the amounts potentially subject to risk. The measurement of the risks associated with these instruments is meaningful only when all related and offsetting transactions are considered.
At September 30, 2013, there were no obligations outstanding under these financial instruments.
The Trust is subject to interest rate risk in the normal course of pursuing its investment objectives. Because the Trust holds fixed-rate bonds, the value of these bonds may decrease if interest rates rise. During the six months ended September 30, 2013, the Trust purchased and sold U.S. Treasury futures contracts to hedge against changes in interest rates.
The effect of derivative instruments (not considered to be hedging instruments for accounting disclosure purposes) on the Statement of Operations and whose primary underlying risk exposure is interest rate risk for the six months ended September 30, 2013 was as follows:
| Realized Gain (Loss) on Derivatives Recognized in Income |
Change in Unrealized Appreciation (Depreciation) on Derivatives Recognized in Income |
|||||||
| Futures Contracts |
$ | (775,684)(1) | $ | 463,025 | (2) | |||
| (1) | Statement of Operations location: Net realized gain (loss) — Financial futures contracts. |
| (2) | Statement of Operations location: Change in unrealized appreciation (depreciation) — Financial futures contracts. |
The average notional amount of futures contracts outstanding during the six months ended September 30, 2013, which is indicative of the volume of this derivative type, was $1,639,000.
8 Fair Value Measurements
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.
| Ÿ | Level 1 — quoted prices in active markets for identical investments |
| Ÿ | Level 2 — other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.) |
| Ÿ | 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 September 30, 2013, the hierarchy of inputs used in valuing the Trust’s investments, which are carried at value, were as follows:
| Asset Description | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
| Tax-Exempt Investments |
$ | — | $ | 360,330,956 | $ | — | $ | 360,330,956 | ||||||||
| Total Investments |
$ | — | $ | 360,330,956 | $ | — | $ | 360,330,956 | ||||||||
The Trust held no investments or other financial instruments as of March 31, 2013, whose fair value was determined using Level 3 inputs. At September 30, 2013, there were no investments transferred between Level 1 and Level 2 during the six months then ended.
| 16 |
Eaton Vance
National Municipal Opportunities Trust
September 30, 2013
Board of Trustees’ Contract Approval
Overview of the Contract Review Process
The Investment Company Act of 1940, as amended (the “1940 Act”), provides, in substance, that each investment advisory agreement between a fund and its investment adviser will continue in effect from year to year only if its continuation is approved at least annually by the fund’s board of trustees, including by a vote of a majority of the trustees who are not “interested persons” of the fund (“Independent Trustees”), cast in person at a meeting called for the purpose of considering such approval.
At a meeting of the Boards of Trustees (each a “Board”) of the Eaton Vance group of mutual funds (the “Eaton Vance Funds”) held on April 23, 2013, the Board, including a majority of the Independent Trustees, voted to approve continuation of existing advisory and sub-advisory agreements for the Eaton Vance Funds for an additional one-year period. In voting its approval, the Board relied upon the affirmative recommendation of the Contract Review Committee of the Board, which is a committee comprised exclusively of Independent Trustees. Prior to making its recommendation, the Contract Review Committee reviewed information furnished by each adviser to the Eaton Vance Funds (including information specifically requested by the Board) for a series of meetings of the Contract Review Committee held between February and April 2013, as well as information considered during prior meetings of the committee. Such information included, among other things, the following:
Information about Fees, Performance and Expenses
| Ÿ | An independent report comparing the advisory and related fees paid by each fund with fees paid by comparable funds; |
| Ÿ | An independent report comparing each fund’s total expense ratio and its components to comparable funds; |
| Ÿ | An independent report comparing the investment performance of each fund (including, where relevant, yield data, Sharpe ratios and information ratios) to the investment performance of comparable funds over various time periods; |
| Ÿ | Data regarding investment performance in comparison to benchmark indices and customized peer groups, in each case as approved by the Board with respect to the funds; |
| Ÿ | For each fund, comparative information concerning the fees charged and the services provided by each adviser in managing other accounts (including mutual funds, other collective investment funds and institutional accounts) using investment strategies and techniques similar to those used in managing such fund; |
| Ÿ | Profitability analyses for each adviser with respect to each fund; |
Information about Portfolio Management and Trading
| Ÿ | Descriptions of the investment management services provided to each fund, including the investment strategies and processes employed, and any changes in portfolio management processes and personnel; |
| Ÿ | Information about the allocation of brokerage and the benefits received by each adviser as a result of brokerage allocation, including information concerning the acquisition of research through client commission arrangements and the fund’s policies with respect to “soft dollar” arrangements; |
| Ÿ | Data relating to portfolio turnover rates of each fund; |
| Ÿ | The procedures and processes used to determine the fair value of fund assets and actions taken to monitor and test the effectiveness of such procedures and processes; |
| Ÿ | Information about each adviser’s processes for monitoring best execution of portfolio transactions, and other policies and practices of each adviser with respect to trading; |
Information about each Adviser
| Ÿ | Reports detailing the financial results and condition of each adviser; |
| Ÿ | Descriptions of the qualifications, education and experience of the individual investment professionals whose responsibilities include portfolio management and investment research for the funds, and information relating to their compensation and responsibilities with respect to managing other mutual funds and investment accounts; |
| Ÿ | Copies of the Codes of Ethics of each adviser and its affiliates, together with information relating to compliance with and the administration of such codes; |
| Ÿ | Copies of or descriptions of each adviser’s policies and procedures relating to proxy voting, the handling of corporate actions and class actions; |
| Ÿ | Information concerning the resources devoted to compliance efforts undertaken by each adviser and its affiliates on behalf of the funds (including descriptions of various compliance programs) and their record of compliance with investment policies and restrictions, including policies with respect to market-timing, late trading and selective portfolio disclosure, and with policies on personal securities transactions; |
| Ÿ | Descriptions of the business continuity and disaster recovery plans of each adviser and its affiliates; |
| Ÿ | A description of Eaton Vance Management’s procedures for overseeing third party advisers and sub-advisers, including with respect to regulatory and compliance issues, investment management and other matters; |
| 17 |
Eaton Vance
National Municipal Opportunities Trust
September 30, 2013
Board of Trustees’ Contract Approval — continued
Other Relevant Information
| Ÿ | Information concerning the nature, cost and character of the administrative and other non-investment management services provided by Eaton Vance Management and its affiliates; |
| Ÿ | Information concerning management of the relationship with the custodian, subcustodians and fund accountants by each adviser or the funds’ administrator; and |
| Ÿ | The terms of each advisory agreement. |
In addition to the information identified above, the Contract Review Committee considered information provided from time to time by each adviser throughout the year at meetings of the Board and its committees. Over the course of the twelve-month period ended April 30, 2013, with respect to one or more funds, the Board met eight times and the Contract Review Committee, the Audit Committee, the Governance Committee, the Portfolio Management Committee and the Compliance Reports and Regulatory Matters Committee, each of which is a Committee comprised solely of Independent Trustees, met eight, twenty-one, five, nine and thirteen times respectively. At such meetings, the Trustees participated in investment and performance reviews with the portfolio managers and other investment professionals of each adviser relating to each fund. The Board and its Committees considered the investment and trading strategies used in pursuing each fund’s investment objective, including, where relevant, the use of derivative instruments, as well as processes for monitoring best execution of portfolio transactions and risk management techniques. The Board and its Committees also evaluated issues pertaining to industry and regulatory developments, compliance procedures, fund governance and other issues with respect to the funds, and received and participated in reports and presentations provided by Eaton Vance Management and other fund advisers with respect to such matters.
For funds that invest through one or more underlying portfolios, the Board considered similar information about the portfolio(s) when considering the approval of advisory agreements. In addition, in cases where the fund’s investment adviser has engaged a sub-adviser, the Board considered similar information about the sub-adviser when considering the approval of any sub-advisory agreement.
The Contract Review Committee was assisted throughout the contract review process by Goodwin Procter LLP, legal counsel for the Independent Trustees. The members of the Contract Review Committee relied upon the advice of such counsel and their own business judgment in determining the material factors to be considered in evaluating each advisory and sub-advisory agreement and the weight to be given to each such factor. The conclusions reached with respect to each advisory and sub-advisory agreement were based on a comprehensive evaluation of all the information provided and not any single factor. Moreover, each member of the Contract Review Committee may have placed varying emphasis on particular factors in reaching conclusions with respect to each advisory and sub-advisory agreement.
Results of the Process
Based on its consideration of the foregoing, and such other information as it deemed relevant, including the factors and conclusions described below, the Contract Review Committee concluded that the continuation of the investment advisory and administrative agreement of Eaton Vance National Municipal Opportunities Trust (the “Fund”) with Eaton Vance Management (the “Adviser”), including its fee structure, is in the interests of shareholders and, therefore, the Contract Review Committee recommended to the Board approval of the agreement. The Board accepted the recommendation of the Contract Review Committee as well as the factors considered and conclusions reached by the Contract Review Committee with respect to the agreement. Accordingly, the Board, including a majority of the Independent Trustees, voted to approve continuation of the investment advisory and administrative agreement for the Fund
Nature, Extent and Quality of Services
In considering whether to approve the investment advisory and administrative agreement of the Fund, the Board evaluated the nature, extent and quality of services provided to the Fund by the Adviser.
The Board considered the Adviser’s management capabilities and investment process with respect to the types of investments held by the Fund, including the education, experience and number of its investment professionals and other personnel who provide portfolio management, investment research, and similar services to the Fund. In particular, the Board considered, where relevant, the abilities and experience of such investment personnel in analyzing factors such as credit risk, tax efficiency and special considerations relevant to investing in municipal obligations, Treasury securities and other securities backed by the U.S. government or its agencies. The Board considered the Adviser’s large municipal bond team, which includes portfolio managers and credit specialists who provide services to the Fund. The Board also took into account the resources dedicated to portfolio management and other services, including the compensation methods of the Adviser to recruit and retain investment personnel, and the time and attention devoted to the Fund by senior management.
The Board reviewed the compliance programs of the Adviser and relevant affiliates thereof. Among other matters, the Board considered compliance and reporting matters relating to personal trading by investment personnel, selective disclosure of portfolio holdings, late trading, frequent trading, portfolio valuation, business continuity and the allocation of investment opportunities. The Board also evaluated the responses of the Adviser and its affiliates to requests in recent years from regulatory authorities such as the Securities and Exchange Commission and the Financial Industry Regulatory Authority.
| 18 |
Eaton Vance
National Municipal Opportunities Trust
September 30, 2013
Board of Trustees’ Contract Approval — continued
The Board considered shareholder and other administrative services provided or managed by Eaton Vance Management and its affiliates, including transfer agency and accounting services. The Board evaluated the benefits to shareholders of investing in a fund that is a part of a large family of funds.
After consideration of the foregoing factors, among others, the Board concluded that the nature, extent and quality of services provided by the Adviser, taken as a whole, are appropriate and consistent with the terms of the investment advisory and administrative agreement.
Fund Performance
The Board compared the Fund’s investment performance to a relevant universe of similarly managed funds identified by an independent data provider and appropriate benchmark indices and assessed the Fund’s performance on the basis of total return and current income return. The Board’s review included comparative performance data for the one- and three-year periods ended September 30, 2012 for the Fund. The Board considered the impact of extraordinary market conditions in recent years on the Fund’s performance in light of, among other things, the Adviser’s efforts to generate competitive levels of tax exempt current income over time through investments that, relative to its peer universe, focus on higher quality municipal bonds with longer maturities. The Board noted that the Adviser had taken action to restructure the Fund’s portfolio as part of a long-term strategy for managing interest rate risk, consistent with the Fund’s objective of providing current income. The Board concluded that the Fund’s performance had been satisfactory on the basis of current income return, and that it was appropriate to continue to monitor the effectiveness of the actions taken by the Adviser to improve Fund performance on the basis of total return, which the Board noted had improved for periods ended as of December 31, 2012.
Management Fees and Expenses
The Board reviewed contractual investment advisory and administrative fee rates payable by the Fund (referred to as “management fees”). As part of its review, the Board considered the management fees and the Fund’s total expense ratio for the year ended September 30, 2012, as compared to a group of similarly managed funds selected by an independent data provider. The Board also considered factors that had an impact on Fund expense ratios, as identified by management in response to inquiries from the Contract Review Committee, as well as actions taken by management in recent years to reduce expenses at the Eaton Vance fund complex level, including the negotiation of reduced fees for transfer agency and custody services.
After reviewing the foregoing information, and in light of the nature, extent and quality of the services provided by the Adviser, the Board concluded that the management fees charged for advisory and related services are reasonable.
Profitability
The Board reviewed the level of profits realized by the Adviser and relevant affiliates thereof in providing investment advisory and administrative services to the Fund and to all Eaton Vance Funds as a group. The Board considered the level of profits realized without regard to revenue sharing or other payments by the Adviser and its affiliates to third parties in respect of distribution services. The Board also considered other direct or indirect benefits received by the Adviser and its affiliates in connection with their relationships with the Fund, including the benefits of research services that may be available to the Adviser as a result of securities transactions effected for the Fund and other investment advisory clients.
The Board concluded that, in light of the foregoing factors and the nature, extent and quality of the services rendered, the profits realized by the Adviser and its affiliates are reasonable.
Economies of Scale
In reviewing management fees and profitability, the Board also considered the extent to which the Adviser and its affiliates, on the one hand, and the Fund, on the other hand, can expect to realize benefits from economies of scale as the assets of the Fund increase. The Board acknowledged the difficulty in accurately measuring the benefits resulting from the economies of scale with respect to the management of any specific fund or group of funds. The Board reviewed data summarizing the increases and decreases in the assets of the Fund and of all Eaton Vance Funds as a group over various time periods, and evaluated the extent to which the total expense ratio of the Fund and the profitability of the Adviser and its affiliates may have been affected by such increases or decreases. Based upon the foregoing, the Board concluded that the Fund currently shares in the benefits from economies of scale. The Board also concluded that, assuming reasonably foreseeable increases in the assets of the Fund, the structure of the advisory fee, which includes breakpoints at several asset levels, will allow the Fund to continue to benefit from economies of scale in the future.
| 19 |
Eaton Vance
National Municipal Opportunities Trust
September 30, 2013
Officers and Trustees
Officers of Eaton Vance National Municipal Opportunities Trust
Trustees of Eaton Vance National Municipal Opportunities Trust
| *Interested | Trustee |
Number of Employees
The Trust is organized as a Massachusetts business trust and is registered under the Investment Company Act of 1940, as amended, as a closed-end management investment company and has no employees.
Number of Shareholders
As of September 30, 2013, Trust records indicate that there are 3 registered shareholders and approximately 8,054 shareholders owning the Trust shares in street name, such as through brokers, banks, and financial intermediaries.
If you are a street name shareholder and wish to receive Trust reports directly, which contain important information about the Trust, please write or call:
Eaton Vance Distributors, Inc.
Two International Place
Boston, MA 02110
1-800-262-1122
New York Stock Exchange Symbol
The New York Stock Exchange symbol is EOT.
| 20 |
Eaton Vance Funds
IMPORTANT NOTICES
Privacy. The Eaton Vance organization is committed to ensuring your financial privacy. Each of the financial institutions identified below has in effect the following policy (“Privacy Policy”) with respect to nonpublic personal information about its customers:
| Ÿ | Only such information received from you, through application forms or otherwise, and information about your Eaton Vance fund transactions will be collected. This may include information such as name, address, social security number, tax status, account balances and transactions. |
| Ÿ | None of such information about you (or former customers) will be disclosed to anyone, except as permitted by law (which includes disclosure to employees necessary to service your account). In the normal course of servicing a customer’s account, Eaton Vance may share information with unaffiliated third parties that perform various required services such as transfer agents, custodians and broker-dealers. |
| Ÿ | Policies and procedures (including physical, electronic and procedural safeguards) are in place that are designed to protect the confidentiality of such information. |
| Ÿ | We reserve the right to change our Privacy Policy at any time upon proper notification to you. Customers may want to review our Privacy Policy periodically for changes by accessing the link on our homepage: www.eatonvance.com. |
Our pledge of privacy applies to the following entities within the Eaton Vance organization: the Eaton Vance Family of Funds, Eaton Vance Management, Eaton Vance Investment Counsel, Eaton Vance Distributors, Inc., Eaton Vance Trust Company, Eaton Vance Management’s Real Estate Investment Group and Boston Management and Research. In addition, our Privacy Policy applies only to those Eaton Vance customers who are individuals and who have a direct relationship with us. If a customer’s account (i.e., fund shares) is held in the name of a third-party financial advisor/broker-dealer, it is likely that only such advisor’s privacy policies apply to the customer. This notice supersedes all previously issued privacy disclosures. For more information about Eaton Vance’s Privacy Policy, please call 1-800-262-1122.
Delivery of Shareholder Documents. The Securities and Exchange Commission (SEC) permits funds to deliver only one copy of shareholder documents, including prospectuses, proxy statements and shareholder reports, to fund investors with multiple accounts at the same residential or post office box address. This practice is often called “householding” and it helps eliminate duplicate mailings to shareholders. Eaton Vance, or your financial advisor, may household the mailing of your documents indefinitely unless you instruct Eaton Vance, or your financial advisor, otherwise. If you would prefer that your Eaton Vance documents not be householded, please contact Eaton Vance at 1-800-262-1122, or contact your financial advisor. Your instructions that householding not apply to delivery of your Eaton Vance documents will be effective within 30 days of receipt by Eaton Vance or your financial advisor.
Portfolio Holdings. Each Eaton Vance Fund and its underlying Portfolio(s) (if applicable) will file a schedule of portfolio holdings on Form N-Q with the SEC for the first and third quarters of each fiscal year. The Form N-Q will be available on the Eaton Vance website at www.eatonvance.com, by calling Eaton Vance at 1-800-262-1122 or in the EDGAR database on the SEC’s website at www.sec.gov. Form N-Q may also be reviewed and copied at the SEC’s public reference room in Washington, D.C. (call 1-800-732-0330 for information on the operation of the public reference room).
Proxy Voting. From time to time, funds are required to vote proxies related to the securities held by the funds. The Eaton Vance Funds or their underlying Portfolios (if applicable) vote proxies according to a set of policies and procedures approved by the Funds’ and Portfolios’ Boards. You may obtain a description of these policies and procedures and information on how the Funds or Portfolios voted proxies relating to portfolio securities during the most recent 12-month period ended June 30, without charge, upon request, by calling 1-800-262-1122 and by accessing the SEC’s website at www.sec.gov.
Share Repurchase Program. On November 11, 2013, the Fund’s Board of Trustees approved a share repurchase program authorizing the Fund to repurchase up to 10% of its currently outstanding common shares in open-market transactions at a discount to net asset value. The repurchase program does not obligate the Fund to purchase a specific amount of shares. The Fund’s repurchase activity, including the number of shares purchased, average price and average discount to net asset value, will be disclosed in the Fund’s annual and semi-annual reports to shareholders.
Additional Notice to Shareholders. If applicable, a Fund may also redeem or purchase its outstanding auction preferred shares (APS) in order to maintain compliance with regulatory requirements, borrowing or rating agency requirements or for other purposes as it deems appropriate or necessary.
Closed-End Fund Information. Eaton Vance closed-end funds make fund performance data and certain information about portfolio characteristics available on the Eaton Vance website shortly after the end of each month. The funds’ net asset value per share is readily accessible on the Eaton Vance website. Portfolio holdings for the most recent month-end are also posted to the website approximately 30 days following the end of the month. This information is available at www.eatonvance.com on the fund information pages under “Individual Investors — Closed-End Funds”.
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| 3741-11/13 | CE-NMOTSRC |
Item 2. Code of Ethics
Not required in this filing.
Item 3. Audit Committee Financial Expert
Not required in this filing.
Item 4. Principal Accountant Fees and Services
Not required in this filing.
Item 5. Audit Committee of Listed Registrants
Not required in this filing.
Item 6. Schedule of Investments
Please see schedule of investments contained in the Report to Stockholders included under Item 1 of this Form N-CSR.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies
Not required in this filing.
Item 8. Portfolio Managers of Closed-End Management Investment Companies
Not required in this filing.
Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers
No such purchases this period.
Item 10. Submission of Matters to a Vote of Security Holders
No material changes.
Item 11. 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 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 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 second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.
Item 12. Exhibits
| (a)(1) | Registrant’s Code of Ethics – Not applicable (please see Item 2). | |
| (a)(2)(i) | Treasurer’s Section 302 certification. | |
| (a)(2)(ii) | President’s Section 302 certification. | |
| (b) | Combined Section 906 certification. |
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 National Municipal Opportunities Trust
| By: | /s/ Cynthia J. Clemson | |
| Cynthia J. Clemson | ||
| President | ||
| Date: | November 7, 2013 | |
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/ James F. Kirchner | |
| James F. Kirchner | ||
| Treasurer | ||
| Date: | November 7, 2013 | |
| By: | /s/ Cynthia J. Clemson | |
| Cynthia J. Clemson | ||
| President | ||
| Date: | November 7, 2013 | |