eUNITs trust to offer units linked to S&P 500 Composite Stock Price

By Angela McDaniels

Tacoma, Wash., Sept. 20 - eUNITs 2 Year U.S. Equity Market Participation Trust: Enhanced Upside to Cap / Buffered Downside plans to sell units of beneficial interest in an initial public offering, according to an N-2 filing with the Securities and Exchange Commission.

The newly organized trust seeks to provide returns based on the performance of the S&P 500 Composite Stock Price index.

Eaton Vance Management is the trust's investment adviser and administrator. Its affiliate, Parametric Risk Advisors LLC, is the subadviser.

The initial net asset value is $10.00 per unit, and the units are expected to be sold for $10.20 each.

The trust will conclude its investment activities in 2012, at which time it will distribute its net assets to the unitholders.

The trust seeks to provide a return equal to any percentage increase in the index, subject to a cap of 22% to 26%. Unitholders will receive only the initial net asset value of the units if the index declines by 15% or less and will lose 1% for every 1% that it declines beyond 15%.

The trust will purchase Treasuries and futures contracts on the index with tenors that are the same as the expected investment life of the trust. The contracts will be structured so that the trust will receive cash from the counterparties if the index increases over the term of the contracts. The trust will have to pay cash to the counterparties if the index decreases by more than 15%.

The notional value of the futures contracts is expected to be at least 80% of the trust's net assets. Eaton Vance will choose the counterparties.

The trust plans to list the units on the New York Stock Exchange.

Eaton Vance Distributors, Inc. is the underwriter.

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