BOSTON, June 29, 2016 /PRNewswire/ -- Eaton Vance Short Duration Diversified Income Fund (NYSE: EVG) (the "Fund"), a diversified closed-end investment company, invests at least 25% of its net assets in each of the following three investment categories:


    --  senior, secured floating rate loans made to corporate and other business
        entities, which are typically rated below investment grade ("Senior
        Loans");
    --  bank deposits denominated in foreign currencies, debt obligations of
        foreign governmental and corporate issuers, including emerging market
        issuers, which are denominated in foreign currencies or U.S. dollars,
        and positions in foreign currencies ("Foreign Obligations"); and
    --  mortgage-backed securities that are issued, backed or otherwise
        guaranteed by the U.S. Government or its agencies or instrumentalities
        or that are issued by private issuers.

The Fund is required to maintain (i) a weighted average portfolio credit quality of investment grade, which is at least BBB- as determined by Standard & Poor's Ratings Services or Fitch Ratings Inc., or Baa3 as determined by Moody's Investors Service, Inc. or, if unrated, determined to be of comparable quality by the adviser ("Average Investment Grade Policy") and (ii) a duration of no more than three years, including the effect of leverage ("Duration Policy").

The Fund has modified its investment policy to allow for investment within its Senior Loans' category in U.S. corporate debt obligations rated below investment grade ("U.S. High Yield Bonds"), commonly referred to as "junk" bonds. The ability to invest in U.S. High Yield Bonds provides the Fund with additional flexibility in seeking its objective. There will be no change to either the Fund's Average Investment Grade Policy or its Duration Policy.

The Fund may obtain investment exposures through long or short positions in derivative instruments, including derivatives with U.S. High Yield Bonds as reference instruments (such as credit default swap indices), and through investment in other investment companies. At least 80% of the Fund's total leveraged assets will continue to be invested in its three principal investment categories as modified collectively, including through the use of derivatives; and the Fund's exposure to each of these categories will equal at least 25% of the Fund's net assets, including through the use of derivatives. Outside of the three investment categories, the Fund may invest in investment grade bonds, including corporate bonds, asset-backed securities and commercial mortgage-backed securities, and other permitted investments.

Senior Loans, U.S. High Yield Bonds, Foreign Obligations and other Fund investments rated below investment grade investments have speculative characteristics because of the credit risk associated with their issuers. Changes in economic conditions or other circumstances typically have a greater effect on the ability of issuers of lower rated investments to make principal and interest payments than they do on issuers of higher rated investments. An economic downturn generally leads to a higher non-payment rate, and a lower rated investment may lose significant value before a default occurs. Lower rated investments typically are subject to greater price volatility and illiquidity than higher rated investments.

The Fund is managed by Eaton Vance Management, a subsidiary of Eaton Vance Corp. (NYSE: EV). With offices in North America, Europe, Asian and Australia, Eaton Vance is one of the oldest investment management firms in the United States, with a history dating back to 1924. Eaton Vance and its affiliates managed $321.0 billion in assets as of May 31, 2016, offering individuals and institutions a broad array of investment strategies and wealth management solutions. For more information about Eaton Vance, visit www.eatonvance.com.

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SOURCE Eaton Vance Management