EVG Eaton Vance Short Duration Diversified Income Fund

Annual Report October 31, 2022

Eaton Vance

Short Duration Diversified Income Fund

Table of Contents
Management’s Discussion of Fund Performance	2
Performance	4
Fund Profile	5
The Fund's Investment Objectives, Principal Strategies and Principal Risks	6
Endnotes and Additional Disclosures	10
Financial Statements	12
Report of Independent Registered Public Accounting Firm	50
Federal Tax Information	51
Dividend Reinvestment Plan	52
Board of Trustees’ Contract Approval	54
Management and Organization	58
Privacy Notice	61
Potential Conflicts of Interest	63
Important Notices	69

Eaton Vance

Short Duration Diversified Income Fund

October 31, 2022

Management’s Discussion of Fund Performance^†

Economic and Market Conditions

For fixed-income investors, the dominant themes of the 12-month period ended October 31, 2022, were persistently high inflation worldwide and attempts by global central banks to tame runaway costs by raising interest rates. The result was a period-long sell-off in fixed-income assets, as nearly all major U.S. fixed-income indexes reported double-digit declines during the period.

Early in the period, U.S. Treasury rates rose against the backdrop of inflationary concerns and anticipation the U.S. Federal Reserve (the Fed) would begin raising the federal funds rate to intentionally curb consumer demand. Initially, the Fed signaled three relatively modest rate hikes for 2022. However, that changed in February when Russia’s invasion of Ukraine sent shock waves through markets worldwide, exacerbating inflationary pressures on energy and food prices. At its March 2022 meeting, the Fed ended a two-year period of near-zero interest rates with a 0.25% increase in the federal funds rate.

Even as the Fed hinted at multiple rate hikes during the period to combat inflation, consumers continued to spend and prices remained on an upward trajectory through the summer. In June, July, and September, the Fed reaffirmed that fighting inflation was its top priority by hiking the federal funds rate 0.75% each time -- to a 3.00%-3.25% range -- its first moves of that magnitude in nearly 30 years. By period-end, the Bloomberg U.S. Treasury Index declined 14.09%.

As yield spreads widened during the period, investment-grade corporate bonds underperformed U.S. Treasurys, suffering one of the worst 12-month periods in U.S. history as the Bloomberg U.S. Corporate Bond Index declined 19.57%.

Despite its lower credit rating, the high yield corporate asset class outperformed both investment-grade assets and Treasurys as the Bloomberg U.S. Corporate High Yield Index returned -11.76% during the period. Mortgage-backed securities underperformed Treasurys, with the Bloomberg U.S. Mortgage-Backed Securities Index returning -15.04%.

In contrast, asset-backed securities (ABS) -- securities backed by a range of corporate and consumer debt -- were one of the best-performing fixed-income asset classes, with the Bloomberg Asset-Backed Securities Index returning -6.07% during the period. The relative outperformance of ABS was due mainly to a comparatively shorter average duration than Treasurys, as represented by the Bloomberg U.S. Treasury Index, during a period of rising interest rates.

Issuer fundamentals for senior loans were relatively strong during the period. While the trailing 12-month default rate rose from 0.20% at the beginning of the period to 0.83% at period-end, the default rate remained well below the market’s long-term historical average of 3.20%.

For the period as a whole, higher quality loans outperformed lower quality issues, with BBB-, BB-, B-, CCC- and D-rated (defaulted) loans within the Index returning 1.98%, 1.36%, -2.42%, -10.66%, and -37.83%, respectively.

Fund Performance

For the 12-month period ended October 31, 2022, Eaton Vance Short Duration Diversified Income Fund (the Fund) returned -12.67% at net asset value of its common shares (NAV). The Fund outperformed its primary benchmark, the Bloomberg U.S. Aggregate Bond Index (the Index), which returned -15.68% during the period. However, the Fund underperformed its secondary benchmark -- 33.33% Morningstar® LSTA® US Leveraged Loan Index^SM (the Loan Index), 33.33% ICE BofA U.S. Mortgage-Backed Securities Index (the MBS Index) and 33.34% J.P. Morgan Emerging Market Bond Index (EMBI) Global Diversified Spread Index (the EMD Index and collectively, the Blended Index) -- which returned -8.98% during the period.

The Fund’s exposure to floating-rate corporate loans contributed to returns relative to the Index during the period, although the performance of this allocation trailed the Loan Index during the period. Within the Fund’s loan sleeve, the top 10 contributors to relative performance included six underperforming issuers included in the Loan Index that the Fund avoided during the period. In contrast, the biggest individual loan detractors included overweight exposures to a struggling mattress maker and an underperforming health care credit that both underperformed the Loan Index during the period.

The Fund’s allocation to non-U.S. investments -- which included a mix of emerging-markets bonds and derivative positions -- contributed to Fund performance relative to the Index, but trailed the EMD Index during the period. On a relative basis, sovereign credit positions in Russia, Ghana, Kenya, and Tanzania were among the top contributors to performance relative to the EMD Index. Top detractors relative to the EMD Index included sovereign credit positions in Ukraine, Belarus, Egypt, and Sri Lanka.

The Fund’s allocation to agency mortgage-backed securities (MBS) contributed to performance relative to the Index, and the allocation handily outperformed the MBS Index, which declined by more than 15% during the period. Outperformance within the MBS sleeve was primarily driven by a preference for higher coupon MBS compared to the MBS Index. These bonds generally carry shorter durations, so they were less negatively impacted by the sharp rise in interest rates during the period.

See Endnotes and Additional Disclosures in this report.

Past performance is no guarantee of future results. Returns are historical and are calculated net of management fees and other expenses by determining the percentage change in net asset value (NAV) or market price (as applicable) with all distributions reinvested in accordance with the Fund’s Dividend Reinvestment Plan. Furthermore, returns do not reflect the deduction of taxes that shareholders may have to pay on Fund distributions or upon the sale of Fund shares. Performance at market price will differ from performance at NAV due to variations in the Fund’s market price versus NAV, which may reflect factors such as fluctuations in supply and demand for Fund shares, changes in Fund distributions, shifting market expectations for the Fund’s future returns and distribution rates, and other considerations affecting the trading prices of closed-end funds. Investment return and principal value will fluctuate so that shares, when sold, may be worth more or less than their original cost. Performance for periods less than or equal to one year is cumulative. Performance is for the stated time period only; due to market volatility, current Fund performance may be lower or higher than the quoted return. For performance as of the most recent month-end, please refer to eatonvance.com.

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Eaton Vance

Short Duration Diversified Income Fund

October 31, 2022

Management’s Discussion of Fund Performance^† — continued

The Fund’s allocations to commercial MBS, high yield corporate bonds, and collateralized loan obligations (CLOs) also contributed to Fund performance relative to the Index during the period, even as returns for these segments were negative for the period. Meanwhile, the Fund’s use of leverage detracted from returns relative to the Index and the Blended Index, which do not employ leverage.

See Endnotes and Additional Disclosures in this report.

Past performance is no guarantee of future results. Returns are historical and are calculated net of management fees and other expenses by determining the percentage change in net asset value (NAV) or market price (as applicable) with all distributions reinvested in accordance with the Fund’s Dividend Reinvestment Plan. Furthermore, returns do not reflect the deduction of taxes that shareholders may have to pay on Fund distributions or upon the sale of Fund shares. Performance at market price will differ from performance at NAV due to variations in the Fund’s market price versus NAV, which may reflect factors such as fluctuations in supply and demand for Fund shares, changes in Fund distributions, shifting market expectations for the Fund’s future returns and distribution rates, and other considerations affecting the trading prices of closed-end funds. Investment return and principal value will fluctuate so that shares, when sold, may be worth more or less than their original cost. Performance for periods less than or equal to one year is cumulative. Performance is for the stated time period only; due to market volatility, current Fund performance may be lower or higher than the quoted return. For performance as of the most recent month-end, please refer to eatonvance.com.

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Eaton Vance

Short Duration Diversified Income Fund

October 31, 2022

Fund Profile

Asset Allocation (% of total investments)1

Footnotes:

1	Including the Fund’s use of leverage, Asset Allocation as a percentage of the Fund’s net assets amounted to 132.7%.

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Eaton Vance

Short Duration Diversified Income Fund

October 31, 2022

The Fund's Investment Objectives, Principal Strategies and Principal Risks^‡

Investment Objectives. The Fund’s investment objective is to provide a high level of current income. The Fund may, as a secondary objective, also seek capital appreciation to the extent consistent with its primary goal of high current income.

Principal Strategies. The Fund will invest at least 25% of its net assets in each of the following three investment categories: (i) senior, secured floating rate loans made to corporate and other business entities, which are typically rated below investment grade (“Senior Loans”); (ii) 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; and (iii) 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 may invest, 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.

At least 80% of the Fund’s total leveraged assets will be invested in its three principal investment categories, including through the use of derivatives; 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. Total leveraged assets are net assets plus liabilities or obligations attributable to investment leverage and the notional value of long and short forward foreign currency contracts, futures contracts and swaps held by the Fund. 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. The Fund may enter into forward commitments to buy or sell agency MBS (to-be-announced transaction, or “TBAs”).

The Fund may also invest in investment grade bonds, including corporate bonds, asset-backed securities and commercial mortgage-backed securities, and other permitted investments. The Fund is required to maintain (i) a weighted average portfolio credit quality of investment grade, which is at least BBB- as determined by S&P Global Ratings 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 and (ii) a duration of no more than three years, including the effect of leverage.

The Fund may execute short sales of sovereign bonds and may enter into reverse repurchase agreements.

The Fund employs leverage to seek opportunities for additional income. Leverage may amplify the effect on the Fund’s NAV of any increase or decrease in the value of investments held. There can be no assurance that the use of borrowings will be successful. The Fund has borrowed to establish leverage. The Fund also may establish leverage through derivatives and reverse repurchase agreements.

Principal Risks

Market Discount Risk. As with any security, the market value of the common shares may increase or decrease from the amount initially paid for the common shares. The Fund’s common shares have traded both at a premium and at a discount relative to NAV. The shares of closed-end management investment companies frequently trade at a discount from their NAV. This is a risk separate and distinct from the risk that the Fund’s NAV may decrease.

Market Risk. The value of investments held by the Fund may increase or decrease in response to, social, economic, political, financial, public health crises or other disruptive events (whether real, expected or perceived) in the U.S. and global markets and include events such as war, natural disasters, epidemics and pandemics, terrorism, conflicts and social unrest. These events may negatively impact broad segments of businesses and populations and may exacerbate pre-existing risks to the Fund. The frequency and magnitude of resulting changes in the value of the Fund’s investments cannot be predicted. Certain securities and other investments held by the Fund may experience increased volatility, illiquidity, or other potentially adverse effects in reaction to changing market conditions. Monetary and/or fiscal actions taken by U.S. or foreign governments to stimulate or stabilize the global economy may not be effective and could lead to high market volatility. No active trading market may exist for certain investments held by the Fund, which may impair the ability of the Fund to sell or to realize the current valuation of such investments in the event of the need to liquidate such assets. No active trading market may exist for certain investments held by the Fund, which may impair the ability of the Fund to sell or to realize the current valuation of such investments in the event of the need to liquidate such assets.

Credit Risk. Investments in fixed income and other debt obligations, including loans, (referred to below as “debt instruments”) are subject to the risk of non-payment of scheduled principal and interest. Changes in economic conditions or other circumstances may reduce the capacity of the party obligated to make principal and interest payments on such instruments and may lead to defaults. Such non-payments and defaults may reduce the value of Fund shares and income distributions. The value of debt instruments also may decline because of concerns about the issuer’s ability to make principal and interest payments. In addition, the credit ratings of debt instruments may be lowered if the financial condition of the party obligated to make payments with respect to such instruments deteriorates. In the event of bankruptcy of the issuer of a debt instrument, the Fund could experience delays or limitations with respect to its ability to realize the benefits of any collateral securing the instrument. In order to enforce its rights in the event of a default, bankruptcy or similar situation, the Fund may be required to retain legal or similar counsel, which may increase the Fund’s operating expenses and adversely affect net asset value.

Foreign Investment Risk. Foreign investments can be adversely affected by political, economic and market developments abroad, including the imposition of economic and other sanctions by the United States or another country against the particular country or countries, organizations, entities and/or individuals. There may be less publicly available information about foreign issuers because they may not be subject to reporting practices, requirements or regulations comparable to those to which United States companies are subject. Adverse changes in investment regulations, capital requirements or exchange controls could adversely affect the value of the Fund’s investments. Foreign markets may be smaller, less liquid and more volatile than the major markets in the United States, and as a result, Fund share values may be more volatile. Trading in foreign markets typically involves higher expense than

See Endnotes and Additional Disclosures in this report.

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Eaton Vance

Short Duration Diversified Income Fund

October 31, 2022

The Fund's Investment Objectives, Principal Strategies and Principal Risks^‡ — continued

trading in the United States. The Fund may have difficulties enforcing its legal or contractual rights in a foreign country. Economic data as reported by sovereign entities may be delayed, inaccurate or fraudulent. In the event of a default by a sovereign entity, there are typically no assets to be seized or cash flows to be attached. Furthermore, the willingness or ability of a sovereign entity to restructure defaulted debt may be limited. Therefore, losses on sovereign defaults may far exceed the losses from the default of a similarly rated United States debt issuer.

Emerging Markets Investment Risk. Investment markets within emerging market countries are typically smaller, less liquid, less developed and more volatile than those in more developed markets like the United States, and may be focused in certain sectors. Emerging market securities often involve greater risks than developed market securities. The information available about an emerging market issuer may be less reliable than for comparable issuers in more developed capital markets. The Fund may invest in Sukuk, which are foreign or emerging market securities based on Islamic principles. Sukuk are securities with cash flows similar to conventional bonds, issued by an issuer, which is usually a special purpose vehicle incorporated by the sovereign or corporate entity seeking financing, to obtain an upfront payment in exchange for an income stream and a future promise to return capital. Such income stream may or may not be linked to a tangible asset. For Sukuk that are not linked to a tangible asset, the Sukuk represents a contractual payment obligation of the issuer or issuing vehicle to pay income or periodic payments or distributions to the investor, and such contractual payment obligation is linked to the issuer or issuing vehicle and not from interest on the investor's money for Sukuk. For Sukuk linked to a tangible asset, the Fund will not have a direct interest in, or recourse to, the underlying asset or pool of assets. Sukuk involve many of the same risks that conventional bonds incur, such as credit risk and interest rate risk, as well as the risks associated with foreign or emerging market securities. In addition to these risks, there are certain risks specific to Sukuk, such as those relating to their structures. The unique characteristics of Sukuk may lead to uncertainties regarding their tax treatment within the Fund. In light of tax requirements applicable to the Fund, it may be necessary or advisable for the Fund to sell one or more Sukuk (or another investment), including at a disadvantageous time or price. As a result, the Fund may incur losses or costs associated with such transaction.

Currency Risk. Exchange rates for currencies fluctuate daily. The value of foreign investments may be affected favorably or unfavorably by changes in currency exchange rates in relation to the U.S. dollar. Currency markets generally are not as regulated as securities markets and currency transactions are subject to settlement, custodial and other operational risks.

Interest Rate Risk. In general, the value of income securities will fluctuate based on changes in interest rates. The value of these securities is likely to increase when interest rates fall and decline when interest rates rise. Duration measures the time-weighted expected cash flows of a fixed-income security, while maturity refers to the amount of time until a fixed-income security matures. Generally, securities with longer durations or maturities are more sensitive to changes in interest rates than securities with shorter durations or maturities, causing them to be more volatile. Conversely, fixed-income securities with shorter durations or maturities will be less volatile but may provide lower returns than fixed-income securities with longer durations or maturities. The impact of interest rate changes is significantly less for floating-rate instruments that have relatively short periodic rate resets (e.g., ninety days or less). In a rising interest rate environment, the durations or maturities of income securities that have the ability to be prepaid or called by the issuer may be extended. In a declining interest rate environment, the proceeds from prepaid or maturing instruments may have to be reinvested at a lower interest rate.

LIBOR Transition and Associated Risk. The London Interbank Offered Rate or LIBOR is used throughout global banking and financial industries to determine interest rates for a variety of financial instruments (such as debt instruments and derivatives) and borrowing arrangements. The ICE Benchmark Administration Limited, the administrator of LIBOR ceased publishing certain LIBOR settings on December 31, 2021, and is expected to cease publishing the remaining LIBOR settings on June 30, 2023. The Fund has exposure to LIBOR-based instruments. Although the transition process away from LIBOR has become increasingly well-defined, the impact on certain debt securities, derivatives and other financial instruments that utilize LIBOR remains uncertain. The transition process may involve, among other things, increased volatility or illiquidity in markets for instruments that currently rely on LIBOR, such as floating-rate debt obligations. Any such effects of the transition away from LIBOR and the adoption of alternative reference rates, as well as other unforeseen effects, could result in losses to the Fund, and such effects may occur prior to the anticipated discontinuation of the remaining LIBOR settings in 2023. Furthermore, the risks associated with the expected discontinuation of LIBOR and transition to replacement rates may be exacerbated if an orderly transition to an alternative reference rate is not completed in a timely manner.

Loans Risk. Loans are traded in a private, unregulated inter-dealer or inter-bank resale market and are generally subject to contractual restrictions that must be satisfied before a loan can be bought or sold. These restriction may impede the Fund’s ability to buy or sell loans (thus affecting their liquidity) and may negatively impact the transaction price. See also “Market Risk” above. It also may take longer than seven days for transactions in loans to settle. The types of covenants included in loan agreements generally vary depending on market conditions, the creditworthiness of the issuer, the nature of the collateral securing the loan and possibly other factors. Loans with fewer covenants that restrict activities of the borrower may provide the borrower with more flexibility to take actions that may be detrimental to the loan holders and provide fewer investor protections in the event of such actions or if covenants are breached. The Fund may experience relatively greater realized or unrealized losses or delays and expense in enforcing its rights with respect to loans with fewer restrictive covenants. Loans to entities located outside of the U.S. may have substantially different lender protections and covenants as compared to loans to U.S. entities and may involve greater risks. The Fund may have difficulties and incur expense enforcing its rights with respect to non-U.S. loans and such loans could be subject to bankruptcy laws that are materially different than in the U.S. Loans may be structured such that they are not securities under securities law, and in the event of fraud or misrepresentation by a borrower, lenders may not have the protection of the anti-fraud provisions of the federal securities laws. Loans are also subject to risks associated with other types of income investments, including credit risk and risks of lower rated investments.

See Endnotes and Additional Disclosures in this report.

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Eaton Vance

Short Duration Diversified Income Fund

October 31, 2022

The Fund's Investment Objectives, Principal Strategies and Principal Risks^‡ — continued

Mortgage- and Asset-Backed Securities Risk. Mortgage- and asset-backed securities represent interests in “pools” of commercial or residential mortgages or other assets, including consumer loans or receivables. Movements in interest rates (both increases and decreases) may quickly and significantly reduce the value of certain types of mortgage- and asset-backed securities. Although certain mortgage- and asset-backed securities are guaranteed as to timely payment of interest and principal by a government entity, the market price for such securities is not guaranteed and will fluctuate. The purchase of mortgage- and asset-backed securities issued by non-government entities may entail greater risk than such securities that are issued or guaranteed by a government entity. Mortgage and asset-backed securities issued by non-government entities may offer higher yields than those issued by government entities, but may also be subject to greater volatility than government issues and can also be subject to greater credit risk and the risk of default on the underlying mortgages or other assets. Investments in mortgage- and asset-backed securities are subject to both extension risk, where borrowers pay off their debt obligations more slowly in times of rising interest rates, and prepayment risk, where borrowers pay off their debt obligations sooner than expected in times of declining interest rates. Asset-backed securities represent interests in a pool of assets, such as home equity loans, commercial mortgage-backed securities (“CMBS”), automobile receivables or credit card receivables, and include collateralized loan obligations (“CLOs”) and stripped securities. Interests in collateralized loan obligations (“CLOs”) are split into two or more portions, called tranches, which vary in risk, maturity, payment priority and yield. Each CLO tranche is entitled to scheduled debt payments from the underlying loans and assumes the risk of a default by the underlying loans. The Fund will indirectly bear any management fees and expenses incurred by a CLO.

Lower Rated Investments Risk. Investments rated below investment grade and comparable unrated investments (sometimes referred to as “junk”) 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.

Derivatives Risk. The Fund’s exposure to derivatives involves risks different from, or possibly greater than, the risks associated with investing directly in securities and other investments. The use of derivatives can lead to losses because of adverse movements in the price or value of the security, instrument, index, currency, commodity, economic indicator or event underlying a derivative (“reference instrument”), due to failure of a counterparty or due to tax or regulatory constraints. Derivatives may create leverage in the Fund, which represents a non-cash exposure to the underlying reference instrument. Leverage can increase both the risk and return potential of the Fund. Derivatives risk may be more significant when derivatives are used to enhance return or as a substitute for a cash investment position, rather than solely to hedge the risk of a position held by the Fund. Use of derivatives involves the exercise of specialized skill and judgment, and a transaction may be unsuccessful in whole or in part because of market behavior or unexpected events. Changes in the value of a derivative (including one used for hedging) may not correlate perfectly with the underlying reference instrument. Derivative instruments traded in over-the-counter markets may be difficult to value, may be illiquid, and may be subject to wide swings in valuation caused by changes in the value of the underlying reference instrument. If a derivative’s counterparty is unable to honor its commitments, the value of Fund shares may decline and the Fund could experience delays in (or be unable to achieve) the return of collateral or other assets held by the counterparty. The loss on derivative transactions may substantially exceed the initial investment, particularly when there is no stated limit on the Fund’s use of derivatives. A derivative investment also involves the risks relating to the reference instrument underlying the investment.

Leverage Risk. Certain Fund transactions may give rise to leverage. Leverage can result from a non-cash exposure to the underlying reference instrument. Leverage can increase both the risk and return potential of the Fund. The Fund may be required to segregate liquid assets or otherwise cover the Fund’s obligation created by a transaction that may give rise to leverage. The use of leverage may cause the Fund to liquidate portfolio positions when it may not be advantageous to do so to satisfy its obligations or to meet segregation requirements. Leverage may cause the Fund’s share price to be more volatile than if it had not been leveraged, as certain types of leverage may exaggerate the effect of any increase or decrease in the Fund’s portfolio securities. The loss on leveraged investments may substantially exceed the initial investment.

Liquidity Risk. The Fund is exposed to liquidity risk when trading volume, lack of a market maker or trading partner, large position size, market conditions, or legal restrictions impair its ability to sell particular investments or to sell them at advantageous market prices. Consequently, the Fund may have to accept a lower price to sell an investment or continue to hold it or keep the position open, sell other investments to raise cash or abandon an investment opportunity, any of which could have a negative effect on the Fund’s performance. These effects may be exacerbated during times of financial or political stress.

Reverse Repurchase Agreements. In the event of the insolvency of the counterparty to a reverse repurchase agreement, recovery of the securities sold by the Fund may be delayed. In a reverse repurchase agreement, the counterparty’s insolvency may result in a loss equal to the amount by which the value of the securities sold by the Fund exceeds the repurchase price payable by the Fund. When the Fund enters into a reverse repurchase agreement, any fluctuations in the market value of either the securities sold to the counterparty or the securities which the Fund purchases with the proceeds under the agreement would affect the value of the Fund’s assets. As a result, such agreements may increase fluctuations in the net asset value of the Fund’s shares. Because reverse repurchase agreements are considered to be a form of borrowing by the Fund (and a loan from the counterparty), they constitute leverage.

Short Sale Risk. The Fund will incur a loss as a result of a short sale if the price of the security sold short increases in value between the date of the short sale and the date on which the Fund purchases the security to replace the borrowed security. Short sale risks include, among others, the potential loss of more money than the actual cost of the investment, and the risk that the third party to the short sale may fail to honor its contract terms, causing a loss to the Fund.

See Endnotes and Additional Disclosures in this report.

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Eaton Vance

Short Duration Diversified Income Fund

October 31, 2022

The Fund's Investment Objectives, Principal Strategies and Principal Risks^‡ — continued

When-Issued and Forward Commitment Risk. Securities purchased on a when-issued or forward commitment basis are subject to the risk that when delivered they will be worth less than the agreed upon payment price.

U.S. Government Securities Risk. Although certain U.S. Government-sponsored agencies (such as the Federal Home Loan Mortgage Corporation and the Federal National Mortgage Association) may be chartered or sponsored by acts of Congress, their securities are neither issued nor guaranteed by the U.S. Treasury. U.S. Treasury securities generally have a lower return than other obligations because of their higher credit quality and market liquidity.

Risks Associated with Active Management. The success of the Fund’s investment strategy depends on portfolio management’s successful application of analytical skills and investment judgment. Active management involves subjective decisions and there is no guarantee that such decisions will produce the desired results or expected returns. For Funds that are both actively managed and use quantitative investment techniques, the portfolio manager uses (or the portfolio managers use) quantitative investment techniques and analyses in making investment decisions for the Fund. For Funds that are both actively managed and use portfolio optimization, the portfolio manager uses (or portfolio managers use) quantitative portfolio optimization and risk management techniques in making investment decisions for the Fund. There can be no assurance that these techniques will achieve the desired results.

Recent Market Conditions. An outbreak of respiratory disease caused by a novel coronavirus was first detected in China in late 2019 and subsequently spread internationally. This coronavirus has resulted in closing borders, enhanced health screenings, changes to healthcare service preparation and delivery, quarantines, cancellations, disruptions to supply chains and customer activity, as well as general concern and uncertainty. The impact of this coronavirus has resulted in a substantial economic downturn. Health crises caused by outbreaks of disease, such as the coronavirus outbreak, may exacerbate other pre-existing political, social and economic risks and disrupt normal market conditions and operations. The impact of this outbreak has negatively affected the worldwide economy, as well as the economies of individual countries and industries, and could continue to affect the market in significant and unforeseen ways. Other epidemics and pandemics that may arise in the future may have similar effects. For example, a global pandemic or other widespread health crisis could cause substantial market volatility and exchange trading suspensions and closures. In addition, the increasing interconnectedness of markets around the world may result in many markets being affected by events or conditions in a single country or region or events affecting a single or small number of issuers. The coronavirus outbreak and public and private sector responses thereto have led to large portions of the populations of many countries working from home for indefinite periods of time, temporary or permanent layoffs, disruptions in supply chains, and lack of availability of certain goods. The impact of such responses could adversely affect the information technology and operational systems upon which the Fund and the Fund’s service providers rely, and could otherwise disrupt the ability of the employees of the Fund’s service providers to perform critical tasks relating to the Fund. Any such impact could adversely affect the Fund’s performance, or the performance of the securities in which the Fund invests and may lead to losses on your investment in the Fund.

Cybersecurity Risk. With the increased use of technologies by Fund service providers to conduct business, such as the Internet, the Fund is susceptible to operational, information security and related risks. In general, cyber incidents can result from deliberate attacks or unintentional events. Cybersecurity failures by or breaches of the Fund’s investment adviser or administrator and other service providers (including, but not limited to, the custodian or transfer agent), and the issuers of securities in which the Fund invests, may disrupt and otherwise adversely affect their business operations. This may result in financial losses to the Fund, impede Fund trading, interfere with the Fund’s ability to calculating its net asset value, interfere with Fund shareholders’ ability to transact business or cause violations of applicable privacy and other laws, regulatory fines, penalties, reputational damage, reimbursement or other compensation costs, or additional compliance costs.

General Fund Investing Risks. The Fund is not a complete investment program and there is no guarantee that the Fund will achieve its investment objectives. It is possible to lose money by investing in the Fund. An investment in the Fund is not a deposit in a bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.

See Endnotes and Additional Disclosures in this report.

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Endnotes and Additional Disclosures

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Endnotes and Additional Disclosures — continued

	Additional Information
	Bloomberg U.S. Treasury Index measures the performance of U.S. Treasuries with a maturity of one year or more. Bloomberg U.S. Corporate Bond Index measures the performance of investment-grade U.S. corporate securities with a maturity of one year or more. Bloomberg U.S. Corporate High Yield Index measures USD-denominated, non-investment grade corporate securities. Bloomberg U.S. Mortgage-Backed Securities Index measures agency mortgage-backed pass-through securities issued by Ginnie Mae (GNMA), Fannie Mae (FNMA), and Freddie Mac (FHLMC). Bloomberg Asset-Backed Securities Index tracks the performance of U.S. dollar denominated investment grade, fixed rate asset-backed securities publicly issued in the U.S. domestic market.
	Duration is a measure of the expected change in price of a bond — in percentage terms — given a one percent change in interest rates, all else being constant. Securities with lower durations tend to be less sensitive to interest rate changes.
	Important Notice to Shareholders
	The Board of Trustees of the Fund approved a change to the Fund’s investment policies with respect to the Fund’s ability to enter into commitments to buy and sell mortgage-backed securities (to-be-announced transactions or TBAs). Effective December 22, 2021, the Fund’s former investment restrictions with respect to TBAs have been removed.

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Portfolio of Investments — continued

Commercial Mortgage-Backed Securities — 10.5%

Security	Principal Amount (000's omitted)		Value
BAMLL Commercial Mortgage Securities Trust:
Series 2019-BPR, Class ENM, 3.843%, 11/5/32(1)(7)	$	795	$    581,553
Series 2019-BPR, Class FNM, 3.843%, 11/5/32(1)(7)		1,605	1,079,686
BBCMS Mortgage Trust, Series 2017-C1, Class D, 3.495%, 2/15/50(1)(7)		700	522,273
COMM Mortgage Trust, Series 2013-CR11, Class D, 5.118%, 8/10/50(1)(7)		2,858	2,726,893
Federal National Mortgage Association Multifamily Connecticut Avenue Securities Trust, Series 2020-01, Class M10, 7.336%, (1 mo. USD LIBOR + 3.75%), 3/25/50(1)(2)		1,000	930,991
JPMBB Commercial Mortgage Securities Trust:
Series 2014-C22, Class D, 4.547%, 9/15/47(1)(7)		1,850	1,363,322
Series 2014-C25, Class D, 3.936%, 11/15/47(1)(7)		360	243,645
MHC Commercial Mortgage Trust, Series 2021-MHC, Class C, 4.763%, (1 mo. USD LIBOR + 1.35%), 4/15/38(1)(2)		1,000	945,033
Morgan Stanley Bank of America Merrill Lynch Trust:
Series 2016-C29, Class D, 3.00%, 5/15/49(1)(8)		1,000	755,772
Series 2016-C32, Class D, 3.396%, 12/15/49(1)(7)(8)		250	181,046
Morgan Stanley Capital I Trust, Series 2016-UBS12, Class D, 3.312%, 12/15/49(1)(8)		1,000	529,537
UBS Commercial Mortgage Trust, Series 2012-C1, Class D, 6.445%, 5/10/45(1)(7)		280	255,982

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Short Duration Diversified Income Fund

October 31, 2022

Portfolio of Investments — continued

Common Stocks — 0.3%

Security	Shares		Value
Electronics/Electrical — 0.0%(9)
Skillsoft Corp.(10)(11)		11,700	$      20,943
			$     20,943
Health Care — 0.0%(9)
Akorn Holding Company, LLC, Class A(10)(11)		6,053	$      36,318
			$     36,318
Nonferrous Metals/Minerals — 0.1%
ACNR Holdings, Inc., Class A(10)(11)		587	$      60,461
			$     60,461
Oil and Gas — 0.1%
AFG Holdings, Inc.(10)(11)(12)		3,122	$       9,272
McDermott International, Ltd.(10)(11)		12,407	6,638
QuarterNorth Energy, Inc.(11)		633	77,543
			$     93,453
Radio and Television — 0.1%
Clear Channel Outdoor Holdings, Inc.(10)(11)		11,266	$      16,110
Cumulus Media, Inc., Class A(10)(11)		6,722	49,541
iHeartMedia, Inc., Class A(10)(11)		4,791	39,670
			$    105,321

Corporate Bonds — 12.4%

Security	Principal Amount (000's omitted)		Value
Aerospace and Defense — 0.1%
TransDigm, Inc., 6.25%, 3/15/26(1)	$	179	$     176,876
			$    176,876
Automotive — 0.5%
Clarios Global, L.P./Clarios US Finance Co.:
6.25%, 5/15/26(1)	$	116	$     112,504
8.50%, 5/15/27(1)		642	630,248
			$    742,752
Banks and Thrifts — 0.2%
Development Bank of Kazakhstan JSC, 2.95%, 5/6/31(13)	$	452	$     340,813
			$    340,813
Building and Development — 0.4%
Builders FirstSource, Inc., 4.25%, 2/1/32(1)	$	500	$     400,943
Greystar Real Estate Partners, LLC, 5.75%, 12/1/25(1)		187	181,170
			$    582,113
Business Equipment and Services — 1.1%
GEMS MENASA Cayman, Ltd./GEMS Education Delaware, LLC, 7.125%, 7/31/26(1)	$	460	$     435,836
Terminix Co., LLC (The), 7.45%, 8/15/27		1,000	1,116,280
			$  1,552,116
Cable and Satellite Television — 0.5%
CCO Holdings, LLC/CCO Holdings Capital Corp.:
4.75%, 3/1/30(1)	$	75	$      63,162
5.50%, 5/1/26(1)		500	481,933
CSC Holdings, LLC, 7.50%, 4/1/28(1)		200	173,647
			$    718,742

Eaton Vance

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October 31, 2022

Portfolio of Investments — continued

Eaton Vance

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Portfolio of Investments — continued

Preferred Stocks — 0.1%

Security	Shares		Value
Nonferrous Metals/Minerals — 0.1%
ACNR Holdings, Inc., 15.00% (PIK)(10)(11)		277	$     171,048
Total Preferred Stocks (identified cost $0)			$    171,048

Senior Floating-Rate Loans — 42.1%(14)

Borrower/Description	Principal Amount* (000's omitted)		Value
Aerospace and Defense — 0.2%
AI Convoy (Luxembourg) S.a.r.l., Term Loan, 8.173%, (USD LIBOR + 3.50%), 1/18/27(15)		97	$      95,250
Dynasty Acquisition Co., Inc.:
Term Loan, 7.254%, (1 mo. USD LIBOR + 3.50%), 4/6/26		79	74,318
Term Loan, 7.254%, (1 mo. USD LIBOR + 3.50%), 4/6/26		42	39,956
			$    209,524
Airlines — 0.3%
Mileage Plus Holdings, LLC, Term Loan, 8.777%, (3 mo. USD LIBOR + 5.25%), 6/21/27		119	$     121,496
SkyMiles IP, Ltd., Term Loan, 7.993%, (3 mo. USD LIBOR + 3.75%), 10/20/27		300	303,084
			$    424,580
Auto Components — 1.1%
Adient US, LLC, Term Loan, 7.004%, (1 mo. USD LIBOR + 3.25%), 4/10/28		123	$     119,580
Clarios Global, L.P., Term Loan, 7.004%, (1 mo. USD LIBOR + 3.25%), 4/30/26		465	453,388
DexKo Global, Inc., Term Loan, 7.476%, (USD LIBOR + 3.75%), 10/4/28(15)		124	112,987
Garrett LX I S.a.r.l., Term Loan, 7.67%, (3 mo. USD LIBOR + 3.25%), 4/30/28		99	96,525
LTI Holdings, Inc., Term Loan, 8.254%, (1 mo. USD LIBOR + 4.50%), 7/24/26		24	22,795
Tenneco, Inc., Term Loan, 6.206%, (1 mo. USD LIBOR + 3.00%), 10/1/25		505	503,797
TI Group Automotive Systems, LLC, Term Loan, 6.924%, (3 mo. USD LIBOR + 3.25%), 12/16/26		99	97,022

Eaton Vance

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October 31, 2022

Portfolio of Investments — continued

Eaton Vance

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October 31, 2022

Portfolio of Investments — continued

Eaton Vance

Short Duration Diversified Income Fund

October 31, 2022

Portfolio of Investments — continued

Eaton Vance

Short Duration Diversified Income Fund

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Portfolio of Investments — continued

Eaton Vance

Short Duration Diversified Income Fund

October 31, 2022

Portfolio of Investments — continued

Eaton Vance

Short Duration Diversified Income Fund

October 31, 2022

Portfolio of Investments — continued

Eaton Vance

Short Duration Diversified Income Fund

October 31, 2022

Portfolio of Investments — continued

Eaton Vance

Short Duration Diversified Income Fund

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Portfolio of Investments — continued

Eaton Vance

Short Duration Diversified Income Fund

October 31, 2022

Portfolio of Investments — continued

Sovereign Government Bonds — 12.1%

Security	Principal Amount* (000's omitted)		Value
Angola — 0.1%
Republic of Angola, 8.00%, 11/26/29(13)		203	$     165,559
			$    165,559
Argentina — 0.1%
Republic of Argentina, 3.875% to 7/9/23, 1/9/38(3)		325	$      84,815
			$     84,815
Armenia — 0.2%
Republic of Armenia:
3.60%, 2/2/31(13)		200	$     137,378
3.95%, 9/26/29(13)		200	145,632
			$    283,010
Azerbaijan — 0.1%
Republic of Azerbaijan, 3.50%, 9/1/32(13)		150	$     120,917
			$    120,917

Eaton Vance

Short Duration Diversified Income Fund

October 31, 2022

Portfolio of Investments — continued

Eaton Vance

Short Duration Diversified Income Fund

October 31, 2022

Portfolio of Investments — continued

Sovereign Loans — 1.0%

Borrower/Description	Principal Amount (000's omitted)		Value
Tanzania — 1.0%
Government of the United Republic of Tanzania, Term Loan, 8.232%, (6 mo. USD LIBOR + 6.30%), 4/28/31(2)	$	1,460	$   1,445,477
Total Sovereign Loans (identified cost $1,460,000)			$  1,445,477

U.S. Government Agency Mortgage-Backed Securities — 24.1%

Security	Principal Amount (000's omitted)		Value
Federal Home Loan Mortgage Corp.:
2.848%, (COF + 1.25%), 1/1/35(19)	$	347	$    337,962
3.50%, 5/1/51		846	749,564
5.00%, 8/1/52		2,622	2,531,008
6.00%, 3/1/29		495	503,851
6.15%, 7/20/27		99	100,643
6.50%, 7/1/32		362	372,213
7.00%, 4/1/36		428	446,817
7.50%, 11/17/24		32	32,152

Warrants — 0.0%

Security	Shares		Value
Leisure Goods/Activities/Movies — 0.0%
Cineworld Group PLC, Exp. 11/23/25(10)(11)		19,735	$           0
			$          0
Retailers (Except Food and Drug) — 0.0%
David’s Bridal, LLC, Exp. 11/26/22(10)(11)(12)		793	$           0
			$          0
Total Warrants (identified cost $0)			$          0

Eaton Vance

Short Duration Diversified Income Fund

October 31, 2022

Portfolio of Investments — continued

Security	Shares		Value
Morgan Stanley Institutional Liquidity Funds - Government Portfolio, Institutional Class, 2.88%(21)		5,734,874	$   5,734,874
Total Affiliated Fund (identified cost $5,734,874)			$  5,734,874

U.S. Treasury Obligations — 0.3%

Security	Principal Amount (000's omitted)		Value
U.S. Treasury Bill, 0.00%, 11/15/22(22)	$	475	$     474,447
Total U.S. Treasury Obligations (identified cost $474,475)			$    474,447
Total Short-Term Investments (identified cost $6,209,349)			$  6,209,321
Total Investments — 132.7% (identified cost $217,640,312)			$186,887,910
Less Unfunded Loan Commitments — (0.0)%(9)			$     (62,299)
Net Investments — 132.7% (identified cost $217,578,013)			$186,825,611
Other Assets, Less Liabilities — (32.7)%			$ (45,942,112)
Net Assets — 100.0%			$140,883,499

Eaton Vance

Short Duration Diversified Income Fund

October 31, 2022

Portfolio of Investments — continued

Forward Foreign Currency Exchange Contracts (OTC)
Currency Purchased		Currency Sold		Counterparty	Settlement Date	Unrealized Appreciation	Unrealized (Depreciation)
USD	1,337,622	EUR	1,362,717	Standard Chartered Bank	11/2/22	$  —	$  (9,082)
USD	71,722	EUR	73,716	Standard Chartered Bank	11/4/22	—	(1,137)
USD	1,349,681	EUR	1,362,716	Standard Chartered Bank	12/2/22	109	—
						$ 109	$(10,219)

Futures Contracts
Description	Number of Contracts	Position	Expiration Date	Notional Amount	Value/Unrealized Appreciation (Depreciation)
Interest Rate Futures
Euro-Bobl	(6)	Short	12/8/22	$   (709,583)	$  8,635
Euro-Bund	(4)	Short	12/8/22	(547,253)	22,515
Euro-Buxl	(2)	Short	12/8/22	(285,051)	28,063

30

See Notes to Financial Statements.

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Short Duration Diversified Income Fund

October 31, 2022

Portfolio of Investments — continued

*	If the Fund is the seller of credit protection, the notional amount is the maximum potential amount of future payments the Fund could be required to make if a credit event, as defined in the credit default swap agreement, were to occur. At October 31, 2022, such maximum potential amount for all open credit default swaps in which the Fund is the seller was $37,956,000.
**	The contract annual fixed rate represents the fixed rate of interest received by the Fund (as a seller of protection) on the notional amount of the credit default swap contract.
***	Current market annual fixed rates, utilized in determining the net unrealized appreciation or depreciation as of period end, serve as an indicator of the market’s perception of the current status of the payment/performance risk associated with the credit derivative. The current market annual fixed rate of a particular reference entity reflects the cost, as quoted by the pricing vendor, of selling protection against default of that entity as of period end and may include upfront payments required to be made to enter into the agreement. The higher the fixed rate, the greater the market perceived risk of a credit event involving the reference entity. A rate identified as “Defaulted” indicates a credit event has occurred for the reference entity.
(1)	Upfront payment is exchanged with the counterparty as a result of the standardized trading coupon.

32

See Notes to Financial Statements.

Eaton Vance

Short Duration Diversified Income Fund

October 31, 2022

Statement of Assets and Liabilities

	October 31, 2022
Assets
Unaffiliated investments, at value (identified cost $209,995,571)	$ 179,624,382
Affiliated investments, at value (identified cost $7,582,442)	7,201,229
Cash	1,463,564
Deposits for derivatives collateral:
Futures contracts	370,449
Centrally cleared derivatives	4,299,786
OTC derivatives - forward foreign currency exchange contracts	267,300
Deposits for forward commitment securities	10,000
Foreign currency, at value (identified cost $957,368)	951,569
Interest receivable	1,386,357
Interest and dividends receivable from affiliated investments	24,661
Receivable for investments sold	1,335,365
Receivable for variation margin on open futures contracts	74,179
Receivable for open forward foreign currency exchange contracts	109
Receivable for open swap contracts	47,208
Receivable for closed swap contracts	100,384
Receivable from the transfer agent	37,822
Prepaid upfront fees on notes payable	15,473
Prepaid expenses and other assets	3,868
Total assets	$197,213,705
Liabilities
Notes payable	$ 32,000,000
Payable for when-issued/delayed delivery/forward commitment securities	23,054,028
Payable for variation margin on open centrally cleared derivatives	38,094
Payable for open forward foreign currency exchange contracts	10,219
Payable for open swap contracts	61,382
Upfront receipts on open non-centrally cleared swap contracts	654,059
Payable to affiliates:
Investment adviser fee	143,274
Trustees' fees	1,398
Accrued expenses	367,752
Total liabilities	$ 56,330,206
Net Assets	$140,883,499
Sources of Net Assets
Common shares, $0.01 par value, unlimited number of shares authorized	$ 134,391
Additional paid-in capital	194,368,602
Accumulated loss	(53,619,494)
Net Assets	$140,883,499
Common Shares Issued and Outstanding	13,439,130
Net Asset Value Per Common Share
Net assets ÷ common shares issued and outstanding	$ 10.48

33

See Notes to Financial Statements.

Eaton Vance

Short Duration Diversified Income Fund

October 31, 2022

Statement of Operations

	Year Ended
	October 31, 2022
Investment Income
Dividend income	$ 10,437
Dividend income from affiliated investments	95,302
Interest and other income	10,856,553
Interest income from affiliated investments	86,564
Total investment income	$ 11,048,856
Expenses
Investment adviser fee	$ 1,859,059
Trustees’ fees and expenses	15,672
Custodian fee	202,648
Transfer and dividend disbursing agent fees	18,160
Legal and accounting services	133,148
Printing and postage	76,801
Interest expense and fees	1,198,382
Miscellaneous	49,175
Total expenses	$ 3,553,045
Deduct:
Waiver and/or reimbursement of expenses by affiliate	$ 7,019
Total expense reductions	$ 7,019
Net expenses	$ 3,546,026
Net investment income	$ 7,502,830
Realized and Unrealized Gain (Loss)
Net realized gain (loss):
Investment transactions	$ (12,154,179)
Investment transactions - affiliated investments	(2,146)
Futures contracts	2,183,065
Swap contracts	(1,730,613)
Foreign currency transactions	(184,090)
Forward foreign currency exchange contracts	996,515
Net realized loss	$(10,891,448)
Change in unrealized appreciation (depreciation):
Investments	$ (19,048,728)
Investments - affiliated investments	(224,944)
Futures contracts	988,403
Swap contracts	(48,424)
Foreign currency	(38,459)
Forward foreign currency exchange contracts	(180,170)
Net change in unrealized appreciation (depreciation)	$(18,552,322)
Net realized and unrealized loss	$(29,443,770)
Net decrease in net assets from operations	$(21,940,940)