Build America Bond Portfolio

Build America Bond Portfolio as of October 31, 2010

PORTFOLIO OF INVESTMENTS


Taxable Municipal Securities — 99.1%⁽¹⁾

Principal Amount
(000’s omitted)		Security	Value



Education — 5.2%

$	75	University of Michigan, 5.513%, 4/1/30	$	81,306
	125	University of Minnesota, 5.768%, 2/1/30		129,141
	200	University of Texas, 5.262%, 7/1/39		205,756
	1,875	University of Texas, 6.276%, 8/15/41		2,007,582
	260	University of Virginia, 6.20%, 9/1/39		307,806


			$	2,731,591




General Obligations — 25.2%

$	140	California, 7.55%, 4/1/39	$	147,286
	125	California, 7.95%, 3/1/36		131,640
	100	Chicago, IL, 6.207%, 1/1/36		98,142
	1,025	Commonwealth of Massachusetts, 5.456%, 12/1/39		1,063,284
	740	Connecticut, 5.632%, 12/1/29		778,273
	1,000	County of Forsyth, NC, 5.166%, 4/1/30		1,020,600
	250	Dallas, TX, 5.613%, 2/15/30		265,927
	1,000	Denton County, TX, 5.968%, 7/15/35		1,041,220
	75	Denver, CO, City & County School District No. 1, 5.664%, 12/1/33		79,443
	1,000	Detroit, MI, City School District, 7.747%, 5/1/39		1,121,300
	150	Florida State Board of Education, 5.90%, 6/1/39		153,869
	125	Hawaii, 5.53%, 2/1/30		131,690
	250	Howard, MD, 5.55%, 2/15/30		274,397
	250	Kauai, HI, 5.763%, 8/1/33		265,550
	1,000	Metropolitan Government of Nashville and Davidson County, TN, 5.707%, 7/1/34		1,047,660
	760	Montgomery County, PA, 6.03%, 9/1/39		806,717
	75	New Hampshire, 5.50%, 3/1/29		81,446
	1,470	New York, NY, 5.985%, 12/1/36		1,512,057
	100	Norfolk, VA, 5.962%, 3/1/31		106,967
	215	Ohio, 5.462%, 9/1/30		230,489
	200	Oxford, MI, 6.50%, 5/1/39		203,256
	800	Santa Monica, CA, Community College District, 6.763%, 8/1/34		836,672
	400	Southwest Regional Sanitary Sewer & Water Authority, MI, 6.50%, 4/1/40		411,312
	250	Texas, 5.517%, 4/1/39		270,687
	1,000	Washington, 5.09%, 8/1/33		994,190
	275	Washington, 5.481%, 8/1/39		282,650


			$	13,356,724



Hospital — 1.5%

$	250	King County, WA, Public Hospital District No. 1, 7.90%, 6/15/30	$	255,157
	500	King County, WA, Public Hospital District No. 1, 8.00%, 6/15/40		512,385


			$	767,542




Insured-Electric Utilities — 0.5%

$	250	Kentucky Municipal Power Agency, (AGC), 6.49%, 9/1/37	$	261,055


			$	261,055




Lease Revenue / Certificates of Participation — 4.4%

$	1,525	New Jersey Transportation Trust Fund Authority, 6.561%, 12/15/40	$	1,638,948
	500	Oregon Department of Administrative Services, 6.18%, 5/1/35		514,100
	150	Virginia Public Building Authority, Public Facilities Revenue, 5.75%, 8/1/30		154,960


			$	2,308,008




Other Revenue — 1.0%

$	250	Battery Park City Authority, NY, 6.375%, 11/1/39	$	258,733
	250	Florida State Board of Education, 6.584%, 7/1/29		267,225


			$	525,958




Public Power / Electric Utilities — 9.6%

$	1,000	Indiana Municipal Power Agency, 5.594%, 1/1/42	$	971,770
	1,015	Municipal Electric Authority of Georgia, 6.655%, 4/1/57		1,039,248
	1,000	Nebraska Public Power District, 5.323%, 1/1/30		991,740
	500	Orlando, FL, Utilities Commission, 5.662%, 10/1/40		530,890
	1,500	San Antonio, TX, Electric & Gas Revenue, 6.168%, 2/1/41		1,576,215


			$	5,109,863




Special Tax Revenue — 12.9%

$	1,045	Central Puget Sound Regional Transportation Authority, WA, Sales & Use Tax Revenue, 5.491%, 1/1/39	$	1,104,879
	200	District of Columbia, 5.591%, 12/1/34		211,258
	980	Massachusetts School Building Authority, 5.715%, 8/15/39		1,053,304
	1,000	Miami-Dade County, FL, Transit Sales Surtax Revenue, 5.534%, 7/1/32		973,340
	1,115	Miami-Dade County, FL, Transit Sales Surtax Revenue, 5.624%, 7/1/40		1,081,126

See notes to financial statements

Build America Bond Portfolio as of October 31, 2010

PORTFOLIO OF INVESTMENTS CONT’D


Principal Amount
(000’s omitted)		Security	Value


Special Tax Revenue (continued)


$	1,000	New York City Transitional Finance Authority, 5.508%, 8/1/37	$	994,920
	1,385	New York Urban Development Corp., 5.77%, 3/15/39		1,422,367


			$	6,841,194




Transportation — 14.4%

$	1,000	Kansas Department of Transportation, 4.596%, 9/1/35	$	990,440
	500	Maryland Transportation Authority, 5.604%, 7/1/30		529,105
	500	Maryland Transportation Authority, 5.888%, 7/1/43		548,705
	1,000	Missouri Highway & Transportation Commission, 5.445%, 5/1/33		1,028,240
	780	New Jersey Turnpike Authority, 7.414%, 1/1/40		921,219
	565	Oregon Department of Transportation, 5.834%, 11/15/34		608,138
	1,500	Pennsylvania Turnpike Commission, 5.511%, 12/1/45		1,432,635
	540	Pennsylvania Turnpike Commission, 6.378%, 2/1/37		551,783
	1,000	Texas Transportation Commission, 5.178%, 4/1/30		1,038,360


			$	7,648,625




Water and Sewer — 24.4%

$	750	Chesapeake, VA, Water and Sewer Revenue, 6.283%, 7/1/40	$	812,843
	1,460	Chicago, IL, Metropolitan Water Reclamation District, 5.72%, 12/1/38		1,591,969
	225	Cincinnati, OH, Water System Revenue, 6.458%, 12/1/34		241,740
	1,050	East Bay, CA, Municipal Utility District Water System Revenue, 5.874%, 6/1/40		1,121,431
	100	Jea, FL, Water and Sewer Revenue, 6.21%, 10/1/33		109,320
	380	Knoxville, TN, Wastewater System Revenue, 6.50%, 4/1/43		403,613
	1,000	Los Angeles, CA, Department of Water and Power Waterworks Revenue, 6.008%, 7/1/39		1,059,740
	1,300	Metropolitan St. Louis, MO, Sewer District Wastewater System Revenue, 5.856%, 5/1/39		1,422,538
	1,000	Metropolitan Water District of Southern California, 6.538%, 7/1/39		1,063,640
	1,500	New York, NY, Municipal Water Finance Authority, 6.452%, 6/15/41		1,571,250
	1,000	San Diego County, CA, Water Authority, 6.138%, 5/1/49		1,089,170
	1,000	Washington County, OR, Clean Water Services, 5.701%, 10/1/30		1,066,020
	370	Washington County, OR, Clean Water Services, 5.801%, 10/1/35		386,743
	1,000	Williamsport Sanitary Authority, 5.75%, 1/1/40		984,620


			$	12,924,637



Total Taxable Municipal Securities — 99.1%
(identified cost $52,084,579)			$	52,475,197


Short-Term Investments — 0.0%⁽²⁾

	Interest
Description	(000’s omitted)		Value


Eaton Vance Cash Reserves Fund, LLC, 0.22%⁽³⁾⁽⁴⁾	$	12	$	12,490



Total Short-Term Investments — 0.0%
(identified cost $12,490)			$	12,490



Total Investments — 99.1%
(identified cost $52,097,069)			$	52,487,687



Other Assets, Less Liabilities — 0.9%			$	494,783



Net Assets — 100.0%			$	52,982,470

The percentage shown for each investment category in the Portfolio of Investments is based on net assets.

AGC - Assured Guaranty Corp.

At October 31, 2010, the concentration of the Portfolio’s investments in the various states, determined as a percentage of net assets, is as follows:


Texas			12.1%
New York			10.9%
California			10.3%
Others, representing less than 10% individually			65.8%


(1)		Build America Bonds. Represent taxable municipal obligations issued pursuant to the American Recovery and Reinvestment Act of 2009 or other legislation providing for the issuance of taxable municipal debt on which the issuer receives federal support.

(2)		Amount is less than 0.05%.

(3)		Affiliated investment company available to Eaton Vance portfolios and funds which invests in high quality, U.S. dollar denominated money market instruments. The rate shown is the annualized seven-day yield as of October 31, 2010.

(4)		Net income allocated from the investment in Eaton Vance Cash Reserves Fund, LLC and Cash Management Portfolio, an affiliated investment company, for the fiscal year to date ended October 31, 2010 was $759 and $0, respectively.

See notes to financial statements

Build America Bond Portfolio as of October 31, 2010

FINANCIAL STATEMENTS

Statement of Assets and Liabilities


As of October 31, 2010

Assets

Unaffiliated investments, at value (identified cost, $52,084,579)	$	52,475,197
Affiliated investment, at value (identified cost, $12,490)		12,490
Interest receivable		910,592
Interest receivable from affiliated investment		100


Total assets	$	53,398,379





Liabilities

Notes payable	$	200,000
Payable for investments purchased		104,783
Payable to affiliates:
Investment adviser fee		42,396
Trustees’ fees		125
Accrued expenses		68,605


Total liabilities	$	415,909


Net Assets applicable to investors’ interest in Portfolio	$	52,982,470





Sources of Net Assets

Net proceeds from capital contributions and withdrawals	$	52,591,852
Net unrealized appreciation		390,618


Total	$	52,982,470

Statement of Operations


For the Period Ended
October 31, 2010⁽¹⁾

Investment Income

Interest	$	1,042,639
Interest allocated from affiliated investments		1,195
Expenses allocated from affiliated investments		(436	)


Total investment income	$	1,043,398





Expenses

Investment adviser fee	$	116,033
Trustees’ fees and expenses		1,149
Custodian fee		41,376
Legal and accounting services		33,643
Miscellaneous		10,890


Total expenses	$	203,091


Deduct —
Allocation of expenses to affiliate	$	67,687


Total expense reductions	$	67,687



Net expenses	$	135,404



Net investment income	$	907,994





Realized and Unrealized Gain (Loss)

Net realized gain (loss) —
Investment transactions	$	11,201
Investment transactions allocated from affiliated investments		63


Net realized gain	$	11,264


Change in unrealized appreciation (depreciation) —
Investments	$	390,618


Net change in unrealized appreciation (depreciation)	$	390,618



Net realized and unrealized gain	$	401,882



Net increase in net assets from operations	$	1,309,876


⁽¹⁾	For the period from the start of business, November 17, 2009, to October 31, 2010.

See notes to financial statements

Build America Bond Portfolio as of October 31, 2010

NOTES TO FINANCIAL STATEMENTS

1 Significant Accounting Policies

Build America Bond Portfolio (the Portfolio) is a Massachusetts business trust registered under the Investment Company Act of 1940, as amended (the 1940 Act), as a diversified, open-end management investment company. The Portfolio was organized on October 19, 2009 and remained inactive until November 17, 2009 except for matters related to its organization, including the sale of initial interests of $105,010 and the expensing of $5,000 of organization costs. The Portfolio’s primary investment objective is current income and its secondary objective is capital appreciation. The Declaration of Trust permits the Trustees to issue interests in the Portfolio. At October 31, 2010, Eaton Vance Build America Bond Fund held an interest of 99.8% in the Portfolio.

The following is a summary of significant accounting policies of the Portfolio. The policies are in conformity with accounting principles generally accepted in the United States of America.

A Investment Valuation — 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 debt securities purchased with a remaining maturity of sixty days or less are generally valued at amortized cost, which approximates market value. 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 Portfolio in a manner that most fairly reflects the security’s value, or the amount that the Portfolio 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 all 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 company’s or 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.

The Portfolio may invest in Eaton Vance Cash Reserves Fund, LLC (Cash Reserves Fund), an affiliated investment company managed by Eaton Vance Management (EVM). Cash Reserves Fund generally values its investment securities utilizing the amortized cost valuation technique in accordance with Rule 2a-7 under the 1940 Act. This technique involves initially valuing a portfolio security at its cost and thereafter assuming a constant amortization to maturity of any discount or premium. If amortized cost is determined not to approximate fair value, Cash Reserves Fund may value its investment securities in the same manner as debt obligations described above.

B Investment Transactions — 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.

C Income — Interest income is recorded on the basis of interest accrued, adjusted for amortization of premium or accretion of discount.

D Federal Taxes — The Portfolio has elected to be treated as a partnership for federal tax purposes. No provision is made by the Portfolio for federal or state taxes on any taxable income of the Portfolio because each investor in the Portfolio is ultimately responsible for the payment of any taxes on its share of taxable income. Since at least one of the Portfolio’s investors is a regulated investment company that invests all or substantially all of its assets in the Portfolio, the Portfolio normally must satisfy the applicable source of income and diversification requirements (under the Internal Revenue Code) in order for its investors to satisfy them. The Portfolio will allocate, at least annually among its investors, each investor’s distributive share of the Portfolio’s net investment income, net realized capital gains and any other items of income, gain, loss, deduction or credit.

As of October 31, 2010, the Portfolio had no uncertain tax positions that would require financial statement recognition, de-recognition, or disclosure. The Portfolio’s initial period of operations from November 17, 2009 to October 31, 2010 remains subject to examination by the Internal Revenue Service.

E Expense Reduction — State Street Bank and Trust Company (SSBT) serves as custodian of the Portfolio. Pursuant to the custodian agreement, SSBT receives a fee reduced by credits, which are determined based on the average daily cash balance the Portfolio maintains with

Build America Bond Portfolio as of October 31, 2010

NOTES TO FINANCIAL STATEMENTS CONT’D

SSBT. All credit balances, if any, used to reduce the Portfolio’s custodian fees are reported as a reduction of expenses in the Statement of Operations.

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 Portfolio’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 Portfolio. Under Massachusetts law, if certain conditions prevail, interestholders in the Portfolio could be deemed to have personal liability for the obligations of the Portfolio. However, the Portfolio’s Declaration of Trust contains an express disclaimer of liability on the part of Portfolio interestholders and the By-laws provide that the Portfolio shall assume the defense on behalf of any Portfolio interestholder. Moreover, the By-laws also provide for indemnification out of Portfolio property of any interestholder held personally liable solely by reason of being or having been an interestholder for all loss or expense arising from such liability. Additionally, in the normal course of business, the Portfolio enters into agreements with service providers that may contain indemnification clauses. The Portfolio’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Portfolio that have not yet occurred.

H When-Issued Securities and Delayed Delivery Transactions — The Portfolio 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 Portfolio 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.

2 Investment Adviser Fee and Other Transactions with Affiliates

The investment adviser fee is earned by Boston Management and Research (BMR), a subsidiary of EVM, as compensation for investment advisory services rendered to the Portfolio. The fee is computed at an annual rate of 0.60% of the Portfolio’s average daily net assets up to $1 billion, and is payable monthly. On average daily net assets of $1 billion and over, the annual fee is reduced. Prior to its liquidation in February 2010, the portion of the adviser fee payable by Cash Management Portfolio, an affiliated investment company, on the Portfolio’s investment of cash therein was credited against the Portfolio’s investment adviser fee. The Portfolio currently invests its cash in Cash Reserves Fund. EVM does not currently receive a fee for advisory services provided to Cash Reserves Fund. For the period ended October 31, 2010, the Portfolio’s investment adviser fee totaled $116,352 of which $319 was allocated from Cash Management Portfolio and $116,033 was paid or accrued directly by the Portfolio. For the period ended October 31, 2010, the Portfolio’s investment adviser fee, including the portion allocated from Cash Management Portfolio, was 0.60% (annualized) of the Portfolio’s average daily net assets. In addition, pursuant to a voluntary expense reimbursement, BMR was allocated $67,687 of the Portfolio’s operating expenses for the period ended October 31, 2010.

Except for Trustees of the Portfolio who are not members of EVM’s or BMR’s organizations, officers and Trustees receive remuneration for their services to the Portfolio out of the investment adviser fee. Trustees of the Portfolio 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 period ended October 31, 2010, no significant amounts have been deferred. Certain officers and Trustees of the Portfolio are officers of the above organizations.

3 Purchases and Sales of Investments

Purchases and sales of investments, other than short-term obligations and including maturities, for the period ended October 31, 2010 aggregated $52,286,010 and $197,512, respectively.

4 Federal Income Tax Basis of Investments

The cost and unrealized appreciation (depreciation) of investments of the Portfolio at October 31, 2010, as determined on a federal income tax basis, were as follows:

Build America Bond Portfolio as of October 31, 2010

NOTES TO FINANCIAL STATEMENTS CONT’D


Aggregate cost	$	52,112,889


Gross unrealized appreciation	$	768,381
Gross unrealized depreciation		(393,583	)


Net unrealized appreciation	$	374,798

5 Line of Credit

The Portfolio participates with other portfolios and funds managed by EVM and its affiliates in a $450 million unsecured line of credit agreement with a group of banks. Borrowings are made by the Portfolio solely to facilitate the handling of unusual and/or unanticipated short-term cash requirements. Interest is charged to the Portfolio based on its borrowings at an amount above either the Eurodollar rate or Federal Funds rate. In addition, a fee computed at an annual rate of 0.10% on the daily unused portion of the line of credit is allocated among the participating portfolios and funds at the end of each quarter. Because the line of credit is not available exclusively to the Portfolio, it may be unable to borrow some or all of its requested amounts at any particular time. At October 31, 2010, the Portfolio had a balance outstanding pursuant to this line of credit of $200,000 at an interest rate of 1.44%. Based on the short-term nature of the borrowings under the line of credit and variable interest rate, the carrying value of the borrowings approximated its fair value at October 31, 2010. The Portfolio’s average borrowings or allocated fees during the year ended were not significant.

6 Liquidity Risk

The ability of municipalities to issue Build America Bonds expires on December 31, 2010. If this ability is not extended beyond that date, the number of Build America Bonds available in the market will be limited and there can be no assurance that Build America Bonds will be actively traded. In addition, illiquidity may negatively affect the value of the bonds.

7 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.


	•	Level 1 – quoted prices in active markets for identical investments

	•	Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.)

	•	Level 3 – significant unobservable inputs (including a fund’s own assumptions in determining the fair value of investments)

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.

At October 31, 2010, the inputs used in valuing the Portfolio’s investments, which are carried at value, were as follows:


	Quoted
	Prices in
	Active		Significant
	Markets for		Other		Significant
	Identical		Observable		Unobservable
	Assets		Inputs		Inputs

Asset Description	(Level 1)		(Level 2)		(Level 3)		Total

Taxable Municipal Securities	$	—	$	52,475,197	$	—	$	52,475,197
Short-Term Investments		—		12,490		—		12,490


Total Investments	$	—	$	52,487,687	$	—	$	52,487,687

Build America Bond Portfolio as of October 31, 2010

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Trustees and Investors of Build America Bond Portfolio:

We have audited the accompanying statement of assets and liabilities of Build America Bond Portfolio (the “Portfolio”), including the portfolio of investments, as of October 31, 2010, and the related statement of operations, the statement of changes in net assets, and the supplementary data for the period from the start of business, November 17, 2009, to October 31, 2010. These financial statements and supplementary data are the responsibility of the Portfolio’s management. Our responsibility is to express an opinion on these financial statements and supplementary data based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and supplementary data are free of material misstatement. The Portfolio is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Portfolio’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of October 31, 2010, by correspondence with the custodian and brokers; where replies were not received from brokers, we performed other auditing procedures. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements and supplementary data referred to above present fairly, in all material respects, the financial position of Build America Bond Portfolio as of October 31, 2010, and the results of its operations, the changes in its net assets, and the supplementary data for the period from the start of business, November 17, 2009, to October 31, 2010, in conformity with accounting principles generally accepted in the United States of America.

DELOITTE & TOUCHE LLP

Boston, Massachusetts

December 15, 2010

Eaton Vance Build America Bond Fund

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 for a fund to enter into an investment advisory agreement with an investment adviser, the fund’s board of trustees, including a majority of the trustees who are not “interested persons” of the fund (“Independent Trustees”), must approve the agreement and its terms at an in-person 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 October 19, 2009, the Board, including a majority of the Independent Trustees, voted to approve the investment advisory agreement of the Build America Bond Portfolio (the “Portfolio”), the portfolio in which Eaton Vance Build America Bond Fund (the “Fund”) invests, with Boston Management and Research (the “Adviser”), an affiliate of Eaton Vance Management (“EVM”). The Board reviewed information furnished for the October 19, 2009 meeting as well as information previously furnished with respect to the approval of other investment advisory agreements for other Eaton Vance Funds. Such information included, among other things, the following:

Information about Fees and Expenses


	•	The advisory and related fees to be paid by the Portfolio;
	•	Comparative information concerning fees charged by the Adviser and its affiliates for managing other mutual funds and institutional accounts using investment strategies and techniques similar to those to be used in managing the Portfolio, and concerning fees charged by other advisers for managing funds similar to the Portfolio;

Information about Portfolio Management


	•	Descriptions of the investment management services to be provided to the Portfolio, including the investment strategies and processes to be employed;
	•	Information concerning the allocation of brokerage and the benefits expected to be received by the Adviser as a result of brokerage allocation for the Portfolio, including information concerning the acquisition of research through “soft dollar” benefits received in connection with the Eaton Vance Funds’ brokerage, and the implementation of the soft dollar reimbursement program established with respect to the Eaton Vance Funds;
	•	The procedures and processes to be used to determine the fair value of Portfolio assets and actions to be taken to monitor and test the effectiveness of such procedures and processes;

Information about the Adviser


	•	Reports detailing the financial results and condition of the Adviser;
	•	Descriptions of the qualifications, education and experience of the individual investment professionals whose responsibilities include portfolio management and investment research for the Portfolio, and information relating to their compensation and responsibilities with respect to managing other mutual funds and investment accounts;
	•	Copies of the Codes of Ethics of the Adviser and its affiliates, together with information relating to compliance with and the administration of such codes;
	•	Copies or descriptions of the Adviser’s proxy voting policies and procedures;
	•	Information concerning the resources devoted to compliance efforts undertaken by the Adviser and its affiliates on behalf of the Eaton Vance 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;
	•	Descriptions of the business continuity and disaster recovery plans of the Adviser and its affiliates;

Other Relevant Information


	•	Information concerning the nature, cost and character of the administrative and other non-investment management services to be provided by EVM and its affiliates;
	•	Information concerning management of the relationship with the custodian, subcustodians and fund accountants by the Adviser or the administrator; and
	•	The terms of the advisory agreement.

Eaton Vance Build America Bond Fund

BOARD OF TRUSTEES’ CONTRACT APPROVAL CONT’D

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 Board concluded that the terms of the Portfolio’s investment advisory agreement with the Adviser, including its fee structure, is in the interests of shareholders and, therefore, the Board, including a majority of the Independent Trustees, voted to approve the terms of the advisory agreement for the Portfolio.

Nature, Extent and Quality of Services

In considering whether to approve the investment advisory agreement of the Portfolio, the Board evaluated the nature, extent and quality of services to be provided to the Portfolio by the Adviser.

The Board considered the Adviser’s management capabilities and investment process with respect to the types of investments to be held by the Portfolio, including the education, experience and number of its investment professionals and other personnel who will provide portfolio management, investment research, and similar services to the Portfolio. The Board evaluated, where relevant, the abilities and experience of such investment personnel in analyzing factors such as credit risk and special considerations relevant to investing in income securities, including municipal bonds. The Board noted the Adviser’s in-house research capabilities. The Board also took into account the resources dedicated to portfolio management and other services, including the compensation paid to recruit and retain investment personnel, and the time and attention devoted to the Portfolio by senior management.

The Board also 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 from regulatory authorities such as the Securities and Exchange Commission and the Financial Industry Regulatory Authority.

After consideration of the foregoing factors, among others, the Board concluded that the nature, extent and quality of services to be provided by the Adviser, taken as a whole, are appropriate and consistent with the terms of the investment advisory agreement.

Management Fees and Expenses

The Board reviewed contractual investment advisory fee rates, including any administrative fee rates, to be payable by the Portfolio (referred to as “management fees”). As part of its review, the Board considered the Portfolio’s management fees as compared to a group of similarly managed funds selected by an independent data provider.

After reviewing the foregoing information, and in light of the nature, extent and quality of the services to be provided by the Adviser, the Board concluded that the management fees proposed to be charged for advisory and related services are reasonable.

Profitability

The Board reviewed the level of profits projected to be realized by the Adviser and relevant affiliates thereof in providing investment advisory and administrative services to the Portfolio. The Board considered the level of profits expected to be 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 expected to be received by the Adviser and its affiliates in connection with its relationship with the Portfolio.

The Board concluded that, in light of the foregoing factors and the nature, extent and quality of the services rendered, the profits expected to be 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 Portfolio, on the other hand, can expect to realize benefits from economies of scale as the assets of the Portfolio 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 concluded that the structure of the advisory fee, which includes breakpoints at several asset levels, can be expected to cause the Adviser and its affiliates and the Portfolio to share such benefits equitably.

Eaton Vance Build America Bond Fund

MANAGEMENT AND ORGANIZATION

Fund Management. The Trustees of Eaton Vance Mutual Funds Trust (the Trust) and Build America Bond Portfolio (the Portfolio) are responsible for the overall management and supervision of the Trust’s and Portfolio’s affairs. The Trustees and officers of the Trust and the Portfolio are listed below. Except as indicated, each individual has held the office shown or other offices in the same company for the last five years. Trustees and officers of the Trust and the Portfolio hold indefinite terms of office. The “Noninterested Trustees” consist of those Trustees who are not “interested persons” of the Trust and the Portfolio, as that term is defined under the 1940 Act. The business address of each Trustee and officer is Two International Place, Boston, Massachusetts 02110. As used below, “EVC” refers to Eaton Vance Corp., “EV” refers to Eaton Vance, Inc., “EVM” refers to Eaton Vance Management, “BMR” refers to Boston Management and Research, “Parametric” refers to Parametric Portfolio Associates LLC and “EVD” refers to Eaton Vance Distributors, Inc. EVC and EV are the corporate parent and trustee, respectively, of EVM and BMR. EVD is the Fund’s principal underwriter, the Portfolio’s placement agent and a wholly-owned subsidiary of EVC. Each officer affiliated with Eaton Vance may hold a position with other Eaton Vance affiliates that is comparable to his or her position with EVM listed below.

Position(s)

Term of

Number of Portfolios

with the

Office and

Principal Occupation(s)

in Fund Complex

Name and

Trust and

Length of

During Past Five Years and

Overseen By

Other Directorships Held

Year of Birth

the Portfolio

Service

Other Relevant Experience

Trustee⁽¹⁾

During the Last Five Years⁽²⁾

Interested Trustee

Thomas E. Faust Jr.
1958

Trustee and
President of
the Trust

Trustee of the Trust since 2007, of the Portfolio since 2009 and President of the Trust since 2002

Chairman, Chief Executive Officer and President of EVC, Director and President of EV, Chief Executive Officer and President of EVM and BMR, and Director of EVD. Trustee and/or officer of 184 registered investment companies and 1 private investment company managed by EVM or BMR. Mr. Faust is an interested person because of his positions with EVM, BMR, EVD, EVC and EV, which are affiliates of the Trust and Portfolio.

184

Director of EVC.

Noninterested Trustees

Benjamin C. Esty
1963

Trustee

Of the Trust since 2005 and of the Portfolio since 2009

Roy and Elizabeth Simmons Professor of Business Administration and Finance Unit Head, Harvard University Graduate School of Business Administration.

184

None

Allen R. Freedman
1940

Trustee

Of the Trust since 2007 and of the Portfolio since 2009

Private Investor and Consultant. Former Chairman (2002-2004) and a Director (1983-2004) of Systems & Computer Technology Corp. (provider of software to higher education). Formerly, a Director of Loring Ward International (fund distributor) (2005-2007). Formerly, Chairman and a Director of Indus International, Inc. (provider of enterprise management software to the power generating industry) (2005-2007).

184

Director of Assurant, Inc. (insurance provider) and Stonemor Partners, L.P. (owner and operator of cemeteries).

William H. Park
1947

Trustee

Of the Trust since 2003 and of the Portfolio since 2009

Chief Financial Officer, Aveon Group L.P. (an investment management firm) (since 2010). Formerly, Vice Chairman, Commercial Industrial Finance Corp. (specialty finance company) (2006-2010). Formerly, President and Chief Executive Officer, Prizm Capital Management, LLC (investment management firm) (2002-2005). Formerly, Executive Vice President and Chief Financial Officer, United Asset Management Corporation (an institutional investment management firm) (1982-2001). Formerly, Senior Manager, Price Waterhouse (now PricewaterhouseCoopers) (an independent registered public accounting firm) (1972-1981).

184

None

Ronald A. Pearlman
1940

Trustee

Of the Trust since 2003 and of the Portfolio since 2009

Professor of Law, Georgetown University Law Center. Formerly, Deputy Assistant Secretary (Tax Policy) and Assistant Secretary (Tax Policy), U.S. Department of the Treasury (1983-1985). Formerly, Chief of Staff, Joint Committee on Taxation, U.S. Congress (1988-1990).

184

None

Eaton Vance Build America Bond Fund

MANAGEMENT AND ORGANIZATION CONT’D

Position(s)

Term of

Number of Portfolios

with the

Office and

Principal Occupation(s)

in Fund Complex

Name and

Trust and

Length of

During Past Five Years and

Overseen By

Other Directorships Held

Year of Birth

the Portfolio

Service

Other Relevant Experience

Trustee⁽¹⁾

During the Last Five Years⁽²⁾

Noninterested Trustees (continued)

Helen Frame Peters
1948

Trustee

Of the Trust since 2008 and of the Portfolio since 2009

Professor of Finance, Carroll School of Management, Boston College. Formerly, Dean, Carroll School of Management, Boston College (2000-2002). Formerly, Chief Investment Officer, Fixed Income, Scudder Kemper Investments (investment management firm) (1998-1999). Formerly, Chief Investment Officer, Equity and Fixed Income, Colonial Management Associates (investment management firm) (1991-1998).

184

Director of BJ’s Wholesale Club, Inc. (wholesale club retailer). Formerly, Trustee of SPDR Index Shares Funds and SPDR Series Trust (exchange traded funds) (2000-2009). Formerly, Director of Federal Home Loan Bank of Boston (a bank for banks) (2007-2009).

Lynn A. Stout
1957

Trustee

Of the Trust since 1998 and of the Portfolio since 2009

Paul Hastings Professor of Corporate and Securities Law (since 2006) and Professor of Law (2001-2006), University of California at Los Angeles School of Law. Professor Stout teaches classes in corporate law and securities regulation and is the author of numerous academic and professional papers on these areas.

184

None

Ralph F. Verni
1943

Chairman of
the Board
and Trustee

Chairman of the Board since 2007; Trustee of the Trust since 2005 and of the Portfolio since 2009

Consultant and private investor. Formerly, Chief Investment Officer (1982-1992), Chief Financial Officer (1988-1990) and Director (1982-1992), New England Life. Formerly, Chairperson, New England Mutual Funds (1982-1992). Formerly, President and Chief Executive Officer, State Street Management & Research (1992-2000). Formerly, Chairperson, State Street Research Mutual Funds (1992-2000). Formerly, Director, W.P. Carey, LLC (1998-2004) and First Pioneer Farm Credit Corp. (2002-2006).

184

None

Principal Officers who are not Trustees


	Position(s)	Term of
	with the	Office and
Name and	Trust and	Length of	Principal Occupation(s)
Year of Birth	the Portfolio	Service	During Past Five Years


William H. Ahern, Jr. 1959	Vice President of the Trust	Since 1995	Vice President of EVM and BMR. Officer of 80 registered investment companies managed by EVM or BMR.

John R. Baur 1970	Vice President of the Trust	Since 2008	Vice President of EVM and BMR. Previously, attended Johnson Graduate School of Management, Cornell University (2002-2005), and prior thereto was an Account Team Representative in Singapore for Applied Materials, Inc. Officer of 37 registered investment companies managed by EVM or BMR.

Craig R. Brandon 1966	Vice President of the Portfolio	Since 2009	Vice President of EVM and BMR. Officer of 50 registered investment companies managed by EVM or BMR.

Maria C. Cappellano 1967	Vice President of the Trust	Since 2009	Vice President of EVM and BMR. Officer of 49 registered investment companies managed by EVM or BMR.

Michael A. Cirami 1975	Vice President of the Trust	Since 2008	Vice President of EVM and BMR. Officer of 37 registered investment companies managed by EVM or BMR.

Cynthia J. Clemson 1963	Vice President of the Trust and President of the Portfolio	Vice President of the Trust since 2005 and President of the Portfolio since 2009	Vice President of EVM and BMR. Officer of 96 registered investment companies managed by EVM or BMR.

John H. Croft 1962	Vice President of the Trust	Since 2010	Vice President of EVM and BMR. Officer of 38 registered investment companies managed by EVM or BMR.

Charles B. Gaffney 1972	Vice President of the Trust	Since 2007	Director of Equity Research and a Vice President of EVM and BMR. Officer of 33 registered investment companies managed by EVM or BMR.

Eaton Vance Build America Bond Fund

MANAGEMENT AND ORGANIZATION CONT’D


	Position(s)	Term of
	with the	Office and
Name and	Trust and	Length of	Principal Occupation(s)
Year of Birth	the Portfolio	Service	During Past Five Years


Principal Officers who are not Trustees (continued)

Christine M. Johnston 1972	Vice President of the Trust	Since 2007	Vice President of EVM and BMR. Officer of 40 registered investment companies managed by EVM or BMR.

Aamer Khan 1960	Vice President of the Trust	Since 2005	Vice President of EVM and BMR. Officer of 36 registered investment companies managed by EVM or BMR.

Thomas H. Luster 1962	Vice President of the Trust	Since 2006	Vice President of EVM and BMR. Officer of 55 registered investment companies managed by EVM or BMR.

Jeffrey A. Rawlins 1961	Vice President of the Trust	Since 2009	Vice President of EVM and BMR. Previously, a Managing Director of the Fixed Income Group at State Street Research and Management (1989-2005). Officer of 33 registered investment companies managed by EVM or BMR.

Duncan W. Richardson 1957	Vice President of the Trust	Since 2001	Director of EVC and Executive Vice President and Chief Equity Investment Officer of EVC, EVM and BMR. Officer of 82 registered investment companies managed by EVM or BMR.

Judith A. Saryan 1954	Vice President of the Trust	Since 2003	Vice President of EVM and BMR. Officer of 54 registered investment companies managed by EVM or BMR.

Susan Schiff 1961	Vice President of the Trust	Since 2002	Vice President of EVM and BMR. Officer of 38 registered investment companies managed by EVM or BMR.

Thomas Seto 1962	Vice President of the Trust	Since 2007	Vice President and Director of Portfolio Management of Parametric. Officer of 33 registered investment companies managed by EVM or BMR.

David M. Stein 1951	Vice President of the Trust	Since 2007	Managing Director and Chief Investment Officer of Parametric. Officer of 33 registered investment companies managed by EVM or BMR.

Eric A. Stein 1980	Vice President of the Trust	Since 2009	Vice President of EVM and BMR. Originally joined EVM in July 2002. Prior to re-joining EVM in September 2008, Mr. Stein worked at the Federal Reserve Bank of New York (2007-2008) and attended business school in Chicago, Illinois. Officer of 34 registered investment companies managed by EVM or BMR.

Dan R. Strelow 1959	Vice President of the Trust	Since 2009	Vice President of EVM and BMR. Previously, a Managing Director (since 1988) and Chief Investment Officer (since 2001) of the Fixed Income Group at State Street Research and Management. Officer of 33 registered investment companies managed by EVM or BMR.

Mark S. Venezia 1949	Vice President of the Trust	Since 2007	Vice President of EVM and BMR. Officer of 40 registered investment companies managed by EVM or BMR.

Adam A. Weigold 1975	Vice President	Of the Trust since 2007 and of the Portfolio since 2009	Vice President of EVM and BMR. Officer of 73 registered investment companies managed by EVM or BMR.

Barbara E. Campbell 1957	Treasurer	Of the Trust since 2005 and of the Portfolio since 2009	Vice President of EVM and BMR. Officer of 184 registered investment companies managed by EVM or BMR.

Maureen A. Gemma 1960	Secretary and Chief Legal Officer	Secretary of the Trust since 2007 and of the Portfolio since 2009; and Chief Legal Officer of the Trust since 2008 and of the Portfolio since 2009	Vice President of EVM and BMR. Officer of 184 registered investment companies managed by EVM or BMR.

Eaton Vance Build America Bond Fund

MANAGEMENT AND ORGANIZATION CONT’D


	Position(s)	Term of
	with the	Office and
Name and	Trust and	Length of	Principal Occupation(s)
Year of Birth	the Portfolio	Service	During Past Five Years


Principal Officers who are not Trustees (continued)

Paul M. O’Neil 1953	Chief Compliance Officer	Of the Trust since 2004 and of the Portfolio since 2009	Vice President of EVM and BMR. Officer of 184 registered investment companies managed by EVM or BMR.


(1)		Includes both master and feeder funds in a master-feeder structure.

(2)		During their respective tenures, the Trustees also served as trustees of one or more of the following Eaton Vance funds (which operated in the years noted): Eaton Vance Credit Opportunities Fund (launched in 2005 and terminated in 2010); Eaton Vance Insured Florida Plus Municipal Bond Fund (launched in 2002 and terminated in 2009); and Eaton Vance National Municipal Income Fund (launched in 1998 and terminated in 2009).

The SAI for the Fund includes additional information about the Trustees and officers of the Fund and the Portfolio and can be obtained without charge on Eaton Vance’s website at www.eatonvance.com or by calling 1-800-262-1122.

Investment Adviser of Build America Bond Portfolio

Boston Management and Research

Two International Place

Boston, MA 02110

Administrator of Eaton Vance Build America Bond Fund

Eaton Vance Management

Two International Place

Boston, MA 02110

Principal Underwriter*

Eaton Vance Distributors, Inc.

Two International Place

Boston, MA 02110

(617) 482-8260

Custodian

State Street Bank and Trust Company

200 Clarendon Street

Boston, MA 02116

Transfer Agent

BNY Mellon Asset Servicing

Attn: Eaton Vance Funds

P.O. Box 9653

Providence, RI 02940-9653

(800) 262-1122

Independent Registered Public Accounting Firm

Deloitte & Touche LLP

200 Berkeley Street

Boston, MA 02116-5022

Eaton Vance Build America Bond Fund

Two International Place

Boston, MA 02110

* FINRA BrokerCheck. Investors may check the background of their Investment Professional by contacting the Financial Industry Regulatory Authority (FINRA). FINRA BrokerCheck is a free tool to help investors check the professional background of current and former FINRA-registered securities firms and brokers. FINRA BrokerCheck is available by calling 1-800-289-9999 and at www.FINRA.org. The FINRA BrokerCheck brochure describing the program is available to investors at www.FINRA.org.

This report must be preceded or accompanied by a current prospectus, or summary prospectus, if available. Before investing, investors should consider carefully the Fund’s investment objective(s), risks, and charges and expenses. The Fund’s current prospectus or summary prospectus, if available, contains this and other information about the Fund and is available through your financial advisor. Please read the prospectus carefully before you invest or send money. For further information please call 1-800-262-1122.

Item 2. Code of Ethics

The registrant has adopted a code of ethics applicable to its Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer. The registrant undertakes to provide a copy of such code of ethics to any person upon request, without charge, by calling 1-800-262-1122.

Item 3. Audit Committee Financial Expert

The registrant’s Board has designated William H. Park, an independent trustee, as its audit committee financial expert. Mr. Park is a certified public accountant who is the Chief Financial Officer of Aveon Group, L.P. (an investment management firm). Previously, he served as the Vice Chairman of Commercial Industrial Finance Corp. (specialty finance company), as President and Chief Executive Officer of Prizm Capital Management, LLC (investment management firm), as Executive Vice President and Chief Financial Officer of United Asset Management Corporation (an institutional investment management firm) and as a Senior Manager at Price Waterhouse (now PricewaterhouseCoopers) (an independent registered public accounting firm).

Item 4. Principal Accountant Fees and Services

(a)-(d)

The following table presents the aggregate fees billed to the registrant for the registrant’s initial fiscal period from the commencement of operations on November 17, 2009 to October 31, 2010, by the Fund’s principal accountant, Deloitte & Touche LLP (“D&T”), for professional services rendered for the audit of the registrant’s annual financial statements and fees billed for other services rendered by D&T during such period.


Fiscal Period Ended	10/31/09		10/31/10

Audit Fees	$	0	$	15,000

Audit-Related Fees⁽¹⁾	$	0	$	0

Tax Fees⁽²⁾	$	0	$	10,000

All Other Fees⁽³⁾	$	0	$	0


Total	$	0	$	25,000


⁽¹⁾		Audit-related fees consist of the aggregate fees billed for assurance and related services that are reasonably related to the performance of the audit of the registrant’s financial statements and are not reported under the category of audit fees.

⁽²⁾		Tax fees consist of the aggregate fees billed for professional services rendered by the principal accountant relating to tax compliance, tax advice, and tax planning and specifically include fees for tax return preparation and other related tax compliance/planning matters.

⁽³⁾		All other fees consist of the aggregate fees billed for products and services provided by the registrant’s principal accountant other than audit, audit-related, and tax services.

(e)(1) The registrant’s audit committee has adopted policies and procedures relating to the pre-approval of services provided by the registrant’s principal accountant (the “Pre-Approval Policies”). The Pre-Approval Policies establish a framework intended to assist the audit committee in the proper discharge of its pre-approval responsibilities. As a general matter, the Pre-Approval Policies (i) specify certain types of audit, audit-related, tax, and other services determined to be pre-approved by the audit committee; and (ii) delineate specific procedures governing the mechanics of the pre-approval process, including the approval and monitoring of audit and non-audit service fees. Unless a service is specifically pre-approved under the Pre-Approval Policies, it must be separately pre-approved by the Audit Committee.

The Pre-Approval Policies and the types of audit and non-audit services pre-approved therein must be reviewed and ratified by the registrant’s audit committee at least annually. The registrant’s audit committee maintains full responsibility for the appointment, compensation, and oversight of the work of the registrant’s principal accountant.

(e)(2) No services described in paragraphs (b)-(d) above were approved by the registrant’s audit committee pursuant to the “de minimis exception” set forth in Rule 2-01 (c)(7)(i)(C) of Regulation S-X.

(f) Not applicable.

(g) The following table presents (i) the aggregate non-audit fees (i.e., fees for audit-related, tax, and other services) billed to the registrant by D&T for the registrant’s initial fiscal period ended October 31, 2010; and (ii) the aggregate non-audit fees (i.e., fees for audit-related, tax, and other services) billed to the Eaton Vance organization by D&T for the same time period.


Fiscal Years Ended	10/31/10

Registrant*	$	10,000

Eaton Vance⁽¹⁾	$	278,901


(1)		Certain entities that provide ongoing services to the registrant are subsidiaries of Eaton Vance Corp.

*		Registrant commenced operations on November 17, 2009

(h) The registrant’s audit committee has considered whether the provision by the registrant’s principal accountant of non-audit services to the registrant’s investment adviser and any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant that were not pre-approved pursuant to Rule 2-01(c)(7)(ii) of Regulation S-X is compatible with maintaining the principal accountant’s independence.

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

Not required in this filing.

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.


	Period Ended
Increase (Decrease) in Net Assets	October 31, 2010⁽¹⁾

From operations —
Net investment income	$	907,994
Net realized gain from investment transactions		11,264
Net change in unrealized appreciation (depreciation) from investments		390,618


Net increase in net assets from operations	$	1,309,876


Capital transactions —
Contributions	$	56,998,005
Withdrawals		(5,425,421	)


Net increase from capital transactions	$	51,572,584



Net increase in net assets	$	52,882,460





Net Assets

At beginning of period	$	100,010


At end of period	$	52,982,470


	Period Ended
	October 31, 2010⁽¹⁾



Ratios/Supplemental Data

Ratios (as a percentage of average daily net assets):
Expenses		0.70	%⁽²⁾⁽³⁾
Net investment income		4.65	%⁽²⁾
Portfolio Turnover		1	%⁽⁴⁾


Total Return		12.90	%⁽⁴⁾



Net assets, end of period (000’s omitted)	$	52,982


(1)		For the period from the start of business, November 17, 2009, to October 31, 2010.

(2)		Annualized.

(3)		The investment adviser subsidized certain operating expenses equal to 0.35% of average daily net assets for the period from the start of business, November 17, 2009, to October 31, 2010.

(4)		Not annualized.


4595-12/10	BABSRC