| Valuation method | Value, $ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 91.31 | 498 |
| Intrinsic value (DCF) | 5.56 | -64 |
| Graham-Dodd Method | 36.59 | 139 |
| Graham Formula | 2327.87 | 15135 |
Eaton Vance Tax-Managed Diversified Equity Income Fund (NYSE: ETY) is a closed-end mutual fund managed by Eaton Vance Management, specializing in global dividend-paying equities with a tax-efficient strategy. The fund primarily invests in high-quality, dividend-paying stocks across diversified sectors while employing a covered call strategy on the S&P 500 Index to generate additional income. With a benchmark composed of 80% S&P 500 and 20% FTSE Eurotop 100, ETY offers investors exposure to both U.S. and international markets. The fund’s tax-managed approach aims to minimize tax liabilities, making it attractive for income-focused investors in taxable accounts. As part of the Financial Services sector, ETY stands out for its disciplined equity-income strategy, leveraging Eaton Vance’s long-standing expertise in asset management. With a market cap of ~$2.3B and a strong dividend yield, ETY is positioned as a core holding for investors seeking diversified equity income with tax efficiency.
ETY presents an attractive option for income-seeking investors due to its tax-efficient structure, global equity diversification, and covered call strategy that enhances yield. The fund’s strong net income (~$683M) and EPS ($4.34 diluted) reflect its ability to generate consistent returns, while its 1.022 beta indicates moderate market sensitivity. However, as a closed-end fund, ETY may trade at premiums/discounts to NAV, introducing pricing volatility. The lack of leverage (zero debt) is a positive, but the fund’s reliance on derivatives (options) adds complexity. The ~$1.19/share dividend is a key draw, but investors should monitor sustainability given market-dependent option premiums. Overall, ETY suits tax-conscious investors prioritizing income, though its performance is tied to equity and volatility markets.
ETY competes in the crowded equity-income CEF (closed-end fund) space, differentiating itself through its tax-managed approach and global diversification. Its primary competitive advantage lies in Eaton Vance’s (now part of Morgan Stanley) asset management expertise, particularly in tax-efficient strategies and options overlay techniques. The fund’s dual focus on dividends and covered calls allows it to generate higher yields than passive dividend ETFs, though with greater active risk. Compared to peers, ETY’s global mandate (minimum three countries) provides broader diversification than U.S.-focused income funds. However, its 0.95% expense ratio (as of latest filings) is higher than many ETFs, potentially eroding returns. The fund’s tax efficiency—achieved through loss harvesting and qualified dividends—is a key selling point versus taxable alternatives. Yet, its performance is highly dependent on equity market stability and option premiums, making it less defensive in downturns. Competitors often specialize in either higher-yielding but riskier assets or purely domestic strategies, whereas ETY strikes a middle ground with a balanced risk/reward profile.