Eaton Vance Corp. Statement.

Business Editors

BOSTON--(BUSINESS WIRE)--Sept. 5, 2003

Eaton Vance Corp. (NYSE:EV), through its subsidiaries, sponsors, manages and distributes over 100 mutual funds. In response to inquiries about the Eaton Vance funds occasioned by the recent news about allegations that certain funds (not including Eaton Vance funds) may have encouraged market timing and permitted after-hours trading of funds, the Company issued the following statement by its CEO and Chairman James B. Hawkes (this statement was initially distributed yesterday as a memorandum to employees):

"As you have read in the press, the New York Attorney General's office yesterday settled charges with a hedge fund regarding its alleged arrangement with certain mutual fund complexes to engage in 'market timing' trading of mutual fund shares and illegal after-hours trading of fund shares. Market timing involves the frequent buying and selling (usually by exchanging shares into another fund in the complex) of large numbers of shares of a fund. While market timing is not illegal, it potentially transfers value from the fund's long-term shareholders to the market timer and creates fund expenses unfairly borne by the non-market timing fund shareholders. After-hours trading, which is illegal, is the buying or selling of fund shares after the closing price for the day is established at the 4:00 P.M. closing of the New York Stock Exchange, which gives the trader the advantage of knowing the closing price at the time of his trade. The press has disclosed the names of a number of well-known fund complexes that have allegedly participated in these arrangements, and no doubt there will be investigations of these practices by New York and other states, as well as by the Securities and Exchange Commission.

"I want to assure you that Eaton Vance does not permit, will not permit, and has never permitted illegal after-hours trading of shares of our funds.

"Further, I want you to know that Eaton Vance protects its fund shareholders from the detrimental effects of market timers. Our funds have strict policies, set forth in their prospectuses, providing that the exchange privilege may not be used for market timing (defined as two round-trip exchanges -- an exchange from one fund to another and back again -- in any 12 month period) and that the exchange privilege may be terminated for shareholders that engage in market timing. These policies are vigorously enforced. We routinely refuse orders from investors who we believe are engaging in market timing. We have registered written complaints with broker-dealers whose brokers attempt to market time Eaton Vance funds. In addition, those funds that are most vulnerable to market timing, such as international funds, have redemption fees that apply to redemptions or exchanges occurring within 3 months after purchase. Finally, to further discourage market timing of funds that have large holdings of international securities, whose markets are open after the closing of the New York Stock Exchange, we use an independent pricing service that adjusts the prices of such securities to reflect price movements in similar U.S. securities, thereby eliminating or minimizing the advantage to market timing arbitrageurs.

"We are dismayed that some fund complexes have apparently violated the trust that investors have rightly placed in the mutual fund industry. At Eaton Vance we value our integrity above all, and we will continue to the best of our ability to safeguard our funds and their shareholders."