California is no longer the Golden State in the eyes of Eaton Vance [see profile]. The fund sponsor is planning to merge its $27 million California Limited Maturity Municipal Income Fund [EXCAX] into its $727 million National Limited Maturity Municipal Fund [EXNAX]. The merger, which must be approved by the mutual fund's shareholders, will effectively diversify the mutual fund shareholders. [SEC filing]

The fund board recommended the merger to enable shareholders to benefit from "a larger, more diversified fund with a lower expense ratio and higher yield and distribution rate."

Both funds carry two stars from Morningstar. The California fund has lagged its benchmark over all of the periods covered by Morningstar.

The filing did not discuss what impact, if any, the current financial woes played in the decision to eliminate the fund. 

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