Good morning. My name is Rachel and I'll be your conference operator today. At this time, I would like to welcome everyone to the Eaton Vance Corporation's Fourth Fiscal Quarter Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. [Operator Instructions] Thank you. Dan Cataldo, you may begin your conference.

Good morning and welcome to our 2016 fiscal fourth quarter earnings call and webcast. Here this morning are Tom Faust, Chairman and CEO of Eaton Vance Corp; and Laurie Hylton, our CFO. We will first comment on the quarter and then we will take your questions. The full earnings release and charts we will refer to during the call are available on our website, eatonvance.com, under the heading Press Releases. Today's presentation contains forward-looking statements about our business and financial results. The actual results may differ materially from those projected due to risks and uncertainties in our business, including but not limited to those discussed in our SEC filings. These filings, including our 2015 Annual Report and Form 10-K, are available on our website or at request at no charge. I'll now turn the call over to Tom.

Good morning, and thank you, for joining us. Today we’re reporting adjusting earnings per diluted share as $2.13 for our fiscal year ended October 31, down 7% from $2.29 of adjusted earnings per diluted share in fiscal 2015. This year’s lower earnings reflect a 4% decline in revenue and substantially unchanged adjusted operating expenses, due to the strong recovery in equity markets since the February vows and the company’s positive internal growth, our earnings power improved meaningfully over the course of the fiscal year, setting up favorable earnings comparisons in fiscal 2017. As Laurie will detail in a few minutes, we earned $0.57 per diluted share in the fourth fiscal quarter, an increase of 8% from $0.53 of earnings per diluted share in the fourth quarter of fiscal 2015 and about 2% from $0.56 of adjusted earnings per diluted share in the third quarter of fiscal 2016. Income and net gains on seed capital investments contributed $0.01 to earnings per diluted share in the fourth and third quarter of fiscal 2016, and reduced earnings per diluted share by $0.01 in the fourth quarter of fiscal 2015. Performance fees contributed less than $0.005 per diluted share in the fourth quarter of fiscal 2016 versus the contribution of about $0.01 in the fourth quarter of fiscal 2015 and $0.015 in the third quarter of fiscal 2016. We finished fiscal 2016 with consolidated assets under management of $336.4 billion, up 8% from 12 months earlier and at 1% from the end of the third fiscal quarter. Consolidated net inflows of 4.8 billion in the fourth quarter equate to a 6% annualized internal growth rate, matching our organic growth rate for fiscal 2016 as a whole. Excluding our lower fee [ph] exposure management business, organic growth in assets under management was 3% for the fourth quarter and 5% for the fiscal year in total. While net flows and organic growth in AUM are standard measures of asset manager business performance, we find it increasingly important to understand and track organic revenue growth. Organic revenue growth as we define it represents the change in run rate management fee revenue resulting from net inflows and outflows taking into account the fee rate applicable to each dollar in or out. In the fourth quarter we realized organic revenue growth of 2%, a third consecutive quarter of positive organic revenue growth. For the fiscal year as a whole we had organic revenue growth of just over 1%. [Technical Difficulty]

Okay this is Dan Cataldo, apparently our call got cut off so we apologize for that. We're not sure precisely where we were when it cut off, but Tom is going to go back and start with the update on our custom beta business and again we apologize for this and if there are any questions as a result please don't hesitate to let us know.

Hi, it's Tom again. So, my apologies if we don't pick up where things cut off, which we don't know exactly where the was, I talked about our four key growth initiatives and where we are with those in total and I had some specific comments about two of those, our customer beta and next year's initiative and so I'll pick up and just repeat what I may have said or I think I said at least to the group here, may have said publicly, but I'll start on custom beta. For those not familiar, this is suite of separately managed account strategies that combined the benefits of passive investing with the ability to customize portfolio to meet individual investor preferences and needs. Our custom beta lineup includes parametric core equities and EVM managed municipal bond and corporate bond ladders, compared to index ETS and index mutual funds, our custom beta offerings gives clients the ability to tailor their exposure to achieve better tax outcomes and to reflect clients specified responsible investing criteria factored tilts and portfolio exclusions. And like ETS and mutual funds, custom beta separate accounts can pass through harvested tax losses to offset client gains and other investments. Transition cost and taxes may also be reduced by funding positions in kind. Included in our presentation materials is the slide showing the growth of our custom beta strategies offered as retail and high network separate accounts over the past five years. As you can see our managed assets and custom beta strategies have grown rapidly year-by-year now approaching $45 billion. Fiscal 2016 net inflows of $9.2 billion represented 28% internal growth rate. Although custom beta fees are well below traditional active management this is a highly scalable business for which we see huge growth opportunities as we continue…

Thank you, Tom and good morning. As detailed in our earnings release, we’re reporting adjusted earnings per diluted share of $2.13 for fiscal 2016 versus $2.29 a year ago. On a GAAP basis we earn $2.12 per diluted share in fiscal 2016 and $1.92 per diluted share in fiscal 2015. As you can see in attachment 2 to our press release, $0.01 adjustment to fiscal 2016 earnings per diluted share primarily reflects the closed-end fund structuring fees we paid in the third quarter for the 37% adjustment from recorded GAAP earnings in fiscal 2015 primarily reflects the onetime payment we made to terminate certain closed-end fund service and additional compensation arrangement. Excluding the payment adjusted operating income declined by 12% year-over-year and adjusted operating margins drop from 34% to 31% reflecting a 4% decline in revenue and operating expense that was substantially unchanged. Our fourth quarter results show modestly improved revenue in profits both year-over-year and sequentially. We’re reporting adjusted earnings per diluted share of $0.57 for the fourth quarter of fiscal 2016, compared to $0.53 for the fourth quarter of fiscal 2015, and $0.56 for the third quarter of fiscal 2016. Adjusted earnings for the fourth quarters of fiscal 2016 and 2015 are the same as reported GAAP earnings. While the $0.01 adjustment from reported GAAP earnings at $0.55 in the third quarter of fiscal 2016 reflects the closed-end fund structuring fees we paid last quarter. Fourth quarter revenue was up 2% versus both the fourth quarter of fiscal 2016 and the third quarter of fiscal 2015. We maintained adjusted operating margins of 32% in the final quarter of the fiscal year, flat versus the prior quarter despite losing 2.9 billion in managed assets due to the October market decline. Although we've seen opportunity from modest margin expansion longer…

Okay, thanks Laurie. I think we have a good sense now as to where the call cut off earlier, so I think Tom’s just going to make a few more comments and then we will open it up to questions.

Thanks, Dan. Apparently the one topic that we didn’t cover, that we would like to cover now is the breakdown of our flows, just little color on the flows in the quarter. In our forward reporting I think it was observed by us and others that the trends we had in the fourth quarter were generally consistent with the third quarter perhaps the one exception was Parametrics portfolio implementation business where we had net outflows of about $100 million in the fourth quarter compared to $2.9 billion of net inflows in the prior quarter. All of this decline was attributable to institutional mandates for which the longer-term trends remain strongly positive, even with the down fourth quarter institutional portfolio manager -- institutional portfolio implementation mandates contributed over 4.5 billion to our fiscal 2016 net inflows. Our fourth quarter net inflows into fixed income of 1.7 billion were led by municipal and corporate bond ladders with support from active high yield and management muni strategies. Alternative strategies net inflows of all most 700 million were driven by sales of our two global macro mutual funds with strong performance records now over multiple periods and equity net inflows which will modestly positive had contributions from Parametric and Atlanta Capital managed strategies which were somewhat offset by net outflows from Eaton Vance managed equities. And floating rate bank loans we had net outflows of 600 million in the fourth quarter versus 500 million in the third quarter. The decision by one major intermediary to reallocate away from bank loans accounted for essentially all the fourth quarter net outflows, meaning that net flows from all other sources were substantially flat. While we continue to be subject to these types of lumpy single decision maker flows both positive or negative, market sentiment towards bank loan…

[Operator Instructions] Your first question comes from the line of Glenn Schorr with Evercore. Your line is open.

May be a quick follow up to the floating rate conversation, I think at the last conference you mentioned, you took in a chunk of money, I think it’s 15 billion in the last go around when rates are going round and it proceeded to flow out over the next three years as people kind of pulled on the idea. I guess I’m curious of should we be expecting the same kind of things right now and is there any way to lock those clients and for longer duration? I feels different this time, if feels like it could be more sustained moving rates, but I’m sure we said that before, so just curious the type of clients who -- that bought and sold last time and if there is any way to get them to be longer term commitments?

Interesting question I think 15 billion was roughly the amount of net inflows we had into bank loan mandates in fiscal 2013. And as you pointed out, I think we had modest growth in fiscal 2014 and then over the last two years we’ve had net outflows totaling about 9 billion. Most of that volatility, not all of it, but most of it has been on the retail side. We have a mix of clients, some who presumably are using bank loans as a substitute for short term cash, many of which are making allocations to floating rate income assets as an alternatives to longer duration fixed income in effect trying to earn income, while at the same time avoiding I guess the principal value from -- that'll happen as rates go up. I wish I could say that our business has changed in such a way that I can promise that everyone that buys our bank on strategies is a long term investor. I would think the experience of last time will be, will somewhat inform investors' behavior this time. I would not expect to have to see that same level of you know 15 billion and followed by roughly two thirds of that going out over the next three years. It's hard to say though, markets are dynamic, expectations today look pretty convincing that rates are likely to move up but I would have said the same thing, probably did say the same thing in 2013 where certainly at that point all the pieces seemed to be in place for a period of rising interest rates, we had a falloff in the economy later in that year, really changed the expectations for where rates were going. No doubt the accommodated policy of the Fed and other central bank regulators around the world has contributed significantly to keeping rates low. But as we did see it, we're in an environment today where there are signs of inflation picking up, there are signals from the Fed that they're inclined to raise interest rates going forward or likely as soon as December, we think this puts us in a really outstanding position to grow our bank loan business in 2017. No doubt there will continue to be cycles of periods of inflows and periods of outflows and we're certainly confident that we're likely headed into a period of inflows in 2017 after a couple of years of seeing the market go the other way.

Fair enough, maybe just a related follow up on the muni side. Higher rates in the prospect of lower taxes usually is a bad thing on that front, just curious on what your expectations are for demand on the muni side?

I think that's right most muni mandates, most muni securities that are out there are longer duration, muni is typically issued with a 20 year term, 10 year call date is kind of the typical new issue. Our muni business is substantially diversified compared to where we were a few years ago, our latter business is certainly one of our fastest growing parts of our overall company where you have by the nature of that structure, perhaps less sensitivity to client interest rate expectations there. We also have a range of low duration and we have a floating rate muni fund where we’ve started to see some inflows. So I would expect given we're more diversified in our muni exposure with a range of not only longer duration strategies but also laddered short duration and floating rate strategies, we were actually pretty well positioned for a period of rising rates muni have been on a -- the markets been on a great run in the last couple of years, we've seen nice inflows and to not only our, but many competitors funds and separate accounts there, may be that takes a pause. But I think we're pretty well positioned for that given strong performance across our line ups in a range of duration exposures there.

I appreciate that. Thanks.

Your next question comes from the line of Dan Fannon with Jefferies. Your line is open.

Just a follow-up on the comments around the seasonal first half expenses and margins to be flat. I get these dynamics in the kind of fourth quarter -- I'm sorry the first quarter and kind of the reset of expenses for salaries and some of the onetime stuff, but you mentioned first half kind of pressure and so just kind of want to clarify your outlook versus the first quarter and then kind of the year for margins.

The significant portion of the pressure is in the first quarter, but it obviously trips over little bit into the second quarter as well. And there we’re talking about things like payroll tax reset, so you reset and then over the course of the year that starts to follow off for us. The big part of the slide is in the first half, down into the third quarter and that goes as well for our 401(k) match which is as significant contributor to the increase in comp in the first quarter. So it's just -- there is some impact on the second quarter, it's largely a first quarter effect.

We do have the day count impact in the second quarter [multiple speakers], it's not -- that's not related to the seasonal expense pressures, but it does put pressure on the second quarter revenues.

Great, and then just a follow up on NextShares, the annual expense, sticking with expenses the $8 million or so this past year, just curious as the outlook for that kind of next year, if there is any growth routine to that. And then also with the UBS partnership and their implementation, just curious as to how much I guess from the cost perspective a burden that is, or if that’s been lower or higher than some of the numbers you've talked about previously in terms of getting them fully operable or if that’s -- just kind of any update there to think about, incremental partners in the cost and maybe the challenges there?

Yes, I think we haven’t spoken specifically about the exact amount of the cost associated with the UBS implementation, but I can comment and say that in terms of our total spend for next year we do think that it will uptick modestly, but only modestly. I think we're looking at something, this year we closed out with roughly $8 million of expenses associated directly with our NextShares initiatives. I think I would pushed that up to something around $10 million range in fiscal 2017 recognizing that we are getting a little bit more steam going in terms of the launch and would anticipate that it will have some uptick in expenses there.

Okay, thank you.

Your next question comes from the line of Ken Worthington with JPMorgan. Your line is open.

Maybe first the follow-up on Glen's question about the impact of rising interest rates. So in taking about the floating rate got that talked about diverse [indiscernible] maybe can you take it a little more into the muni latter's, I can't quite tell what your expectations are? I know that product has been particularly good it's a little bit different, so how the rising rate environment may impact that and then you haven’t talked about the global macros suite. I think in taper tantrum it was a little bit disappointing in terms of the defensiveness of that product. I don’t know if the investment priorities would have changed for that fund following the performance in taper tantrum. So just as anything change since last time rates rose and what are your expectation for global macro?

Happy to take those Ken. Just on the -- I guess first starting on the global macro, this is an actively managed strategy, it is a country picking approach were we take long and short exposure to different countries and different market areas based on our view on currencies and rates and other investment factors in those countries. It’s a little hard to say, how we’re going to do in a particular environment, it’s not like a bank loan strategy where, it’s primarily a credit play without an interest rate exposure. So this is -- so the thing about it is, there is a long and short economies around the world often with lot of exposure to emerging markets on the debt side. Our performance has been good, one of the things that is consistently true about the strategy is its strength as a portfolio of diversifier, its return in good marketing environments and bad are consistently show low coloration with U.S. stocks and bonds, and that’s really one of its key strength. So I would point to the strength of the record over multiple time period, but particularly in the last couple of years, under the current management team and its consistent record as a portfolio diversifier and remind me again your second question Ken.

Just on the muni latter’s, you mentioned the diversity of the muni franchise, obviously muni retails probably under pressure with rising rates. But muni latters I don’t have a good sense.

I guess the short answer is we’ll see, we did not have a large muni latter business the last time rates moved up. What I would expect would be to have less interest rates sensitivity in that business, meaning in the flows of that business. Then you would see in a muni bond fund. One of the appeals of ladders is the portfolio construction where you get the transparency into what’s happening there, you get the assurance that positions in the ladder will be rolling of in a very transparent rules based fashion. We think and I think there is good history on this and advisor constructive ladders, and that the clients are more inclined to stay with a ladder type construction then with a fund where, really all they see month-is-months is the performance volatility that you get in a fund. Here while it’s true you’re going to have similar volatility in the underlying bonds, because of the nature of the portfolio construction and the mechanism with which that approached by the advisor and the client, we expect it will show less interest rates sensitivity than traditional muni funds. I would not be surprise though with changes in rate expectations for the mix of business there to shift somewhat. So for example the mix between 5 to 15 year ladders versus 1 to 10 year ladders. If your expectation is that rates might move up, likely we'll see shorter duration ladders, and we’re really indifferent to that in terms of how we approach the business.

Great, thank you very much.

Your next question comes from the line of Patrick Davitt with Autonomous, your line is open.

Back to the bank loan discussion, I appreciate the kind of broad guidance on what you've been seeing over recent days, but if you look at the kind of broader industry trend, the last couple of months, you saw a really-really big uptick at least in the retail data we can see which you don't appear to have benefited from. Obviously, we saw you benefit from it in 2013, so I'm just curious if you could dig in on maybe what's driving that apparent loss of market share.

Yes, we referenced in my prepared remarks and I don't whether this was the part that got cut off or not, but we referenced that the outflows that we experienced in the quarter that ended in October were essentially a function of one large intermediary making a decision to reallocate away from bank loans during the quarter. We believe we were most of their bank loan exposure and so there were roughly $600 million of flows and these came out of our -- these were fund, this was not an institutional account relationship. That's the factor we would point to on a net basis to account for our maybe apparent share loss during the period you're looking at. That was meaningful, the good news is it's done, we look at our flow results on a daily basis which are reported I guess monthly. So the data is out there, you can look at how we're doing, I would think if you would, if you look at the data over the last months you're probably seeing us doing better, that's what our internal numbers show. So we fully expect based on our performance where we are in terms of fee rates and our reputation as a long term leader in this space that if in fact there is a significant recovery in bank loan flows that we will fully participate in that.

Okay, I heard that, I think that’s supposed to adjust for basically flat for the quarter and at least in September and October we saw in the industry flow, a significant uptick from the previous month.

Patrick, I'm looking at a breakdown of the flows between our different vehicles, and our opened end funds would have been solidly positive in the quarter had we not had this one particular outflow. So with kind of -- the other components during the quarter that you don't see is that we were negative in our institutional loan fund. So you don't see those flows publicly, but the combination of that and the allocation out that we saw is basically what drove the flat flows for the quarter. But absence that 600 million in outflows we were strongly positive in retail flows for the quarter.

It's probably worth saying that we're not taking it for granted, that we'll participate fully in inflows into bank loans that we're working hard to make that happen with quite active, quite aggressive marketing campaigns and roadshows in support of our bank loan business ongoing currently.

Thanks that helpful.

Your next question comes from the line of Michael Carrier with Bank of America Merrill Lynch. Your line is open.

Tom just on the portfolio implementation and flows, you mentioned that the outlooks still looks attractive despite the modest outflows in the quarter. Just wanted to get a sense when you think about the portfolio implementation and then exposure management. Like maybe how much visibility do you have in terms of pipeline and maybe better point would be just, when you think about the market size, the opportunity that you guys are targeting, like how big is that because obviously the growth in those areas have been strong?

Let me break that up into a couple of different areas. So what we call custom beta and the slide that appears on our deck doesn’t conform exactly to our reporting of flows by investment mandate. So what we’re calling custom beta and you can see in that slide, a strong long-term trend, most of that is in portfolio implementation, but the fixed income part is not that’s in our fixed income category. So a pretty big chunk of the portfolio implementation category is what we’re calling the equity portion of custom beta and that's showing in that slide. There is also in portfolio implementation a pretty large institutional business and that institutional business is more lumpy, like most institutional businesses and as we described the downturn in overall portfolio implementation flows in the quarter was really completely attributable to what we think are temporary factors effecting that institutional business. So and then I guess the third piece to talk about is exposure management which is the 100% institutional, also lumpy, it's been lumpy in a good way and we certainly expect that to continue. But I would say that if you look inside portfolio and implementation and exposure management together the retail and high net worth piece of that, we don’t have good visibility on individual pieces of business generally, but it's a diversified business with very strong momentum, the underlying drivers of that which is then move to passive, which is the value add that we can provide in terms of tax and customization to reflect responsible investing criteria and other factors and the enhanced service offerings of those products and increase distribution. All of those things argue to us, very strongly that that business will continue to grow in a sustained way, and we think the potential…

Okay that’s helpful color. Just a small thing, when you talk about the margin and the seasonality in the first quarter and second quarter. It makes sense -- I’m just trying to get a sense of, when we think about the market strength or weakness is there a like a certain market environment that that implies, and then just one small thing on the share account. Just given the tick up, just wanted to understand what’s being driven by either grants versus stock price and then the policy on buybacks to either try to keep the share count flatter, do you have any update there?

So the first question in terms of margin and expectations, we’re generally are talking about -- largely when I give that guidance, it’s largely on flat markets. I do think that our comp as a percent of revenues is likely to hang out in that 36% to 37% range in 2017 and that’s currently what we’re -- how we’re looking at the world. In terms of our share count, we bought back to fewer shares in the fourth quarter then we did in the third. We do have the increase in the stock price which does effect that sort of treasury stock calculation you have to do for diluted share is outstanding, so you got two pressures there. We do not have a stated policy in terms of repurchasing shares in order to offset dilution. I think that from a capital management prospective we look at our capital deployment more in terms of priorities. First to grow the business, so that would be in terms of funding organic efforts as well as potential acquisition, maintaining our dividend and then to the extent we think is appropriate entering the market to buy back shares. We have been in the market buying back shares, we would anticipate we would continue to do so. But obviously we stepped back a little bit in the fourth quarter recognizing that we have some cash obligations coming up in relation to the Calvert purchase and obviously we’ve got fourth quarter bonus et cetera. So I wanted to state we will continued to be in the market, but I -- we certainly don’t have a stated policy that we’re going to be out there to offset dilution.

Your next question comes from the line of Chris Shutler with William Blair. Your line is open.

Want a follow up on the back loan discussions. How do you feel about capacity in those strategies today, just thinking that if there is less robust new issuance in a rising rate environment, supply could become constrained and any thoughts there would be helpful?

Yes, I think we’re at about 32 billion-ish in bank loan assets today, I think our peak was probably 45 billion-ish, when we were at that mid-45 range we were starting to talk about the possibility of a close or a pause in accepting new money. We don't see any particular pressures there today. It's certainly possible that if we see robust growth at some point, we'll close this, but I guess it would require a fairly sizeable growth in our business from current levels for us to really entertain those discussions. I was certainly [ph] talking a lot about in 2013 as the business was growing at a quite accelerated pace for a number of consecutive quarters. If that happens again, we will -- and if it proves to be the right thing for our clients, we will contemplate closing the strategy. But from our current size and giving the further build out of the bank loan asset class, we don't think we're anywhere close to that being a current concern.

Okay, makes sense. And on NextShares, just wanted to get your updated thoughts, Tom, on how the conversations are going with kind of larger fund managers and are they telling you they want to see another one or two large distributors, what are kind of the gating factors to get them more engaged?

I think we're getting pretty close, in that, the gating factors were a couple of things. One, is this real, do these things work, are there performance advantages that come from the structure, will they trade acceptably. When we launched our first products back in February and March pretty much the focus was on demonstrating to the market both fund companies, broker dealers and others that this is real, that there is a performance advantage that can come from NextShares and that these things will trade in a fully transparent way with premiers and discounts that are acceptably narrow by market standards. That's been pretty much done, we haven't covered every asset class. But we intentionally chose the first three that covers a range of domestic and international and equity and fixed income strategy. The second requirement which is really the one you touched on in your question is the distribution access. When we launched those first funds the only distributor for NextShares was Folio Investing, which is a small online broker-dealer. Since then we've added Interactive Brokers, which is now up and running and available. You can buy the Eaton Vance and the [indiscernible] sponsored NextShares funds today both at Folio and at Interactive Brokers. The big announcement, the big development over the course of the summer was the announcement that UBS was planning to offer and is supporting its business partner's offering NextShares and I would guess of the Top 20 largest fund companies, none of them have either Folio or Interactive Brokers as one of their top five distribution partners. I would guess of those 20 companies a substantial majority have UBS as one of their largest distribution partners. The way things work in our business frequently is, demand drives product recreation and if UBS is engaging with its business partners to encourage them to offer NextShares, I think it's highly likely that will happen. The barriers to launching NextShares are pretty low, we provide significant technical support of the process the past to regulatory approval is well established and quite short at this point, we don’t think it will take a lot of encouragement from UBS and potentially other broker dealers in 2017 to convince major fund companies to launch new products. We've had conversation over the last maybe two months about new share classes being offered being created and to be offered by fund companies in response to demand from broker dealers. If there is demand for NextShares from UBS and potentially other broker dealers, which I think we should expect to see major fund companies line up to launch strategies in that structure. We’re working hard to make that happen certainly the commitment of UBS to this is a real game changer for us and puts us in a position where we see a much broader range of companies launching NextShares products in 2017.

Alright. Thanks a lot.

Your last question comes from the line of Robert Lee with KBW. Your line is open.

I guess maybe to stick with NextShares as my first question, I'm just curious I mean there are any kind of I guess time pressure you face to try to kind of monetizes this I mean some of you have some underlying patents and whatnot, but patents to grant for certain period of time and then they kind of open up. So is there anything, because these were obviously developed before you bought it, you owned it for a few years before you got the approval and it's taking take some time to kind of monetize it in the marketplace, so do you feel comfortable that you have enough time to monetize this and kind of reap the benefits before there is some pressure on what's proprietary about it?

Good question, I would say our primary driver to get this done is the -- we're spending a fair bit of money. We're spending $8 million, Laurie said in the range of $10 million next year we think. That's the primary motivation from an economic standpoint. I would say it more broadly there is a real sense of mission that we have here, that this is a better way to invest and actively manage strategies and it's partly driven by that sense of mission that we continue to invest in this and continue to push hard to make NextShares a reality in the marketplace. As you pointed out there are part of the basis for this business is patents that were issued I believe initially in the 2005 or 2006 timeframe, those -- the patents right there will expire, but we've -- not surprisingly as we've invested in this business we've also invested in newer technology and have been working on additional patterns as well that we think our protection here will likely extend well beyond that 2026 period that you would normally expect given the 20 year cycle on patents application. So we think there is a significant enough window here to justify this as a quite attractive commercial proposition for Eaton Vance. But our enthusiasm for this is not unending, at some point if this is not going to work, the market will demonstrate that to us clearly. We’re very focused on achieving success here, but are mindful that not all great ideas work. But we want to push this as hard as we can and we’re very committed to doing that throughout 2017.

Great and maybe the follow as, question or two on Calvert, so expected to close hopefully by the end of the year. So where do you see kind of the initial opportunities with that as it -- how quickly can you kind of, for example, plug there funds into your distribution and we that as something than can happen relatively quickly or do you see there is more of an institutional opportunity? I mean how do you think about the path of accelerating there growth?

It’s something we’re very focused on. I would say first on the time of the closing, the key gating item is the approval of fund shareholders, so there is an approximately that’s been sent out, there’s the shareholder meeting that’s been scheduled for I think December 16. There is some possibility that if they don’t get to vote in time, that the closing gets pushed out somewhat, but certainly the early returns are supportive of the vote. But there is requirement in these things that at least 50% of the outstanding shares cast their vote and sometimes it’s a challenge may be particularly at this time of the year to get people to cast their vote even if they don’t necessarily have any objections to what’s being proposed. On the distribution side we’re very focused on that, one of the things that we have done is entered into an agreement between Eaton Vance distributors and Calvert for Eaton Vance to begin marketing, ever prior to the closing. So where we have an agreement in place, so Eaton Vance sales people will be out I think starting next week, actually starting this week, excuse me, talking about Calvert funds, making the case for why Calvert is a stronger and better company as part of Eaton Vance. The growth opportunities we see here really extend across a pretty wide range, Calvert’s growth today is primarily on their equity index products, through working with people at Parametric we think they can potentially broaden the range of index strategies and continue to grow there, just with much greater distribution reach. And there fixed income side of business they got a number of high performing strategies including quite interestingly some short duration and also short duration products that are four and five star rated, that…

Great, thank you very much for the helpful color, appreciate it.

There are no further questions at this time, I'll turn the call back over to Dan Cataldo.

Great and thank you, thank you all for joining us this morning. We wish you all a happy and safe thanksgiving and look forward to reporting back to you at the end of our first fiscal quarter, thank you.

This concludes today's conference call, you may now disconnect.