Eaton Vance has launched the Eaton Vance Tax-Managed Dividend Income Fund, an equity-income fund designed to take advantage of new favorable tax rates on dividend income.

The fund's investment objective is to achieve after-tax total return. It invests mainly in common and preferred stocks that pay dividends that qualify for the new federal tax rules. Under the new legislation, the most dividends will be taxed is at 15%, compared to the 35% ceiling rate on ordinary returns, according to the firm.

"The tax rules that apply to dividend income are complicated, and many dividends do not qualify for favorable tax treatment," said James B. Hawkes, chairman, president and chief executive of Eaton Vance. "For investors who pay taxes on their mutual fund distributions, it is critical that the fund's advisor seek dividends that qualify for favorable tax treatment. The fund gives taxpaying equity income investors the assurance that their objective of after-tax returns is shared by the fund's advisor."

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