Overview

Growth of $10,000

Since Fund inception ended 06/30/2016

  • Class A at NAV

Historical Returns (%)as of Jun 30, 2016

Annualized
1 Mo. 3 Mos. YTD 1 Yr. 3 Yrs. 5 Yrs. Life of Fund
08/31/2016
Fund at NAV 0.31 2.17 5.42 8.75 9.02 6.33 6.67
Fund w/Max Sales Charge -4.45 -2.67 0.39 3.61 7.27 5.31 5.68
Return After Taxes on Dist w/Max Sales Charge 3.50 7.18 5.04 5.43
Return After Taxes on Dist & Sales of Fund Shares w/Max Sales Charge 2.72 5.99 4.45 4.75
Barclays Municipal Bond Index1 0.13 1.79 4.54 6.88 6.46 4.80 5.17
06/30/2016
Fund at NAV 1.88 3.01 5.12 9.55 7.62 6.95 6.84
Fund w/Max Sales Charge -2.95 -1.91 0.10 4.34 5.90 5.92 5.82
Return After Taxes on Dist w/Max Sales Charge 4.23 5.81 5.65 5.56
Return After Taxes on Dist & Sales of Fund Shares w/Max Sales Charge 3.15 4.91 4.94 4.86
Barclays Municipal Bond Index1 1.59 2.61 4.33 7.65 5.58 5.32 5.31
Past performance is no guarantee of future results. Investment return and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Performance is for the stated time period only; due to market volatility, the Fund's current performance may be lower or higher than quoted. Returns are historical and are calculated by determining the percentage change in net asset value (NAV) with all distributions reinvested. Returns for other classes of shares offered by the Fund are different. Performance less than or equal to one year is cumulative. After-tax returns are calculated using certain assumptions, including using the highest historical individual federal income tax rates, and do not reflect the impact of state/local taxes. Actual after-tax returns depend on a shareholder's tax situation and the actual characterization of distributions and may differ from those shown. After-tax returns are not relevant to shareholders who hold shares in tax-deferred accounts or shares held by nontaxable entities. Return After Taxes on Distributions may be the same as Return Before Taxes for the same period because no taxable distributions were made during that period. Return After Taxes on Distributions and Sale of Fund Shares may be greater than or equal to Return After Taxes on Distributions for the same period because of losses realized on the sale of Fund shares. Before-tax and after-tax returns for other classes of shares offered by the Fund are different. Max Sales Charge: 4.75%.

Fund Factsas of Aug 31, 2016

Class A Inception 05/31/2011
Investment Objective Maximize after-tax total return
Total Net Assets $731.5M
Minimum Investment $1000
Expense Ratio (Gross)2 1.06%
Expense Ratio (Net)2,3 1.00%
CUSIP 27826Y571

Top 10 Holdings (%)4,5as of Aug 31, 2016

State of Illinois
Hartford HealthCare Obligated Group
City of New York NY
Lancaster Port Authority
Presence Health Network Obligated Group
City of West Palm Beach FL
Chicago Midway International Airport
Ambac Assurance Corp
North Orange County Community College District/CA
New Jersey Economic Development Authority
Total 13.52

Morningstar™ Ratingsas of Aug 31, 2016

Time Period Rating Rating (Load Waived) Funds in
Muni National Interm
Category
Overall **** **** 308
3 Years **** ***** 308
5 Years **** **** 268
Based on Risk-Adjusted Returns.

The Overall Morningstar Rating for a fund is derived from a weighted average of the performance figures associated with its 3-, 5- and 10-year (if applicable) Morningstar Rating metrics.

© 2016 Morningstar, Inc. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers is responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results. For each fund with at least a three-year history, Morningstar calculates a Morningstar Rating™ based on how a fund ranks on a Morningstar Risk-Adjusted Return measure against other funds in the same category. This measure takes into account variations in a fund's monthly performance after adjusting for sales loads (except for load-waived A shares) redemption fees, and the risk-free rate, placing more emphasis on downward variations and rewarding consistent performance. The top 10% of funds in each category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars and the bottom 10% receive 1 star. Load-waived A share star ratings do not include any front-end sales load and are intended for those investors who have access to such purchase terms (e.g., plan participants of a defined contribution plan). Not all A share mutual funds for which Morningstar calculates a load-waived A share star rating may actually waive their front-end sales load. Therefore, Morningstar strongly encourages investors to contact their investment professional to determine whether they are eligible to purchase the A share without paying the front load. The Morningstar Rating may differ among share classes of a mutual fund as a result of different sales loads and/or expense structure.

Portfolio Management

Adam A. Weigold, CFA Managed Fund since inception

The information included herein does not reflect securities deemed to be held by the Fund pursuant to financial accounting standard 140 (FAS 140).

Portfolio profile subject to change due to active management. Percentages may not total 100% due to rounding.

About Risk 

An imbalance in supply and demand in the municipal market may result in valuation uncertainties and greater volatility, less liquidity, widening credit spreads and a lack of price transparency in the market. There generally is limited public information about municipal issuers. As interest rates rise, the value of certain income investments is likely to decline. Longer-term bonds typically are more sensitive to interest-rate changes than shorter-term bonds. Investments in income securities may be affected by changes in the creditworthiness of the issuer and are subject to the risk of nonpayment of principal and interest. The value of income securities also may decline because of real or perceived concerns about the issuer's ability to make principal and interest payments. Because the Fund may invest significantly in a particular sector, the Fund share value may fluctuate more than a fund with less exposure to such sector. Investments rated below investment grade (typically referred to as "junk") are generally subject to greater price volatility and illiquidity than higher-rated investments. Derivative instruments can be used to take both long and short positions, be highly volatile, result in economic leverage (which can magnify losses), and involve risks in addition to the risks of the underlying instrument on which the derivative is based, such as counterparty, correlation and liquidity risk. If a counterparty is unable to honor its commitments, the value of Fund shares may decline and/or the Fund could experience delays in the return of collateral or other assets held by the counterparty. No Fund is a complete investment program and you may lose money investing in a Fund. The Fund may engage in other investment practices that may involve additional risks and you should review the Fund prospectus for a complete description.


Performance

Historical Returns (%)as of Jun 30, 2016

Annualized
1 Mo. 3 Mos. YTD 1 Yr. 3 Yrs. 5 Yrs. Life of Fund
08/31/2016
Fund at NAV 0.31 2.17 5.42 8.75 9.02 6.33 6.67
Fund w/Max Sales Charge -4.45 -2.67 0.39 3.61 7.27 5.31 5.68
Return After Taxes on Dist w/Max Sales Charge 3.50 7.18 5.04 5.43
Return After Taxes on Dist & Sales of Fund Shares w/Max Sales Charge 2.72 5.99 4.45 4.75
Barclays Municipal Bond Index1 0.13 1.79 4.54 6.88 6.46 4.80 5.17
Morningstar™ Muni National Interm Category6 0.14 1.51 3.74 5.81 5.29 4.03
06/30/2016
Fund at NAV 1.88 3.01 5.12 9.55 7.62 6.95 6.84
Fund w/Max Sales Charge -2.95 -1.91 0.10 4.34 5.90 5.92 5.82
Return After Taxes on Dist w/Max Sales Charge 4.23 5.81 5.65 5.56
Return After Taxes on Dist & Sales of Fund Shares w/Max Sales Charge 3.15 4.91 4.94 4.86
Barclays Municipal Bond Index1 1.59 2.61 4.33 7.65 5.58 5.32 5.31
Morningstar™ Muni National Interm Category6 1.39 2.17 3.62 6.41 4.58 4.48
Past performance is no guarantee of future results. Investment return and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Performance is for the stated time period only; due to market volatility, the Fund's current performance may be lower or higher than quoted. Returns are historical and are calculated by determining the percentage change in net asset value (NAV) with all distributions reinvested. Returns for other classes of shares offered by the Fund are different. Performance less than or equal to one year is cumulative. After-tax returns are calculated using certain assumptions, including using the highest historical individual federal income tax rates, and do not reflect the impact of state/local taxes. Actual after-tax returns depend on a shareholder's tax situation and the actual characterization of distributions and may differ from those shown. After-tax returns are not relevant to shareholders who hold shares in tax-deferred accounts or shares held by nontaxable entities. Return After Taxes on Distributions may be the same as Return Before Taxes for the same period because no taxable distributions were made during that period. Return After Taxes on Distributions and Sale of Fund Shares may be greater than or equal to Return After Taxes on Distributions for the same period because of losses realized on the sale of Fund shares. Before-tax and after-tax returns for other classes of shares offered by the Fund are different. Max Sales Charge: 4.75%.

Calendar Year Returns (%)

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Fund at NAV 9.17 -4.99 14.15 4.03
Barclays Municipal Bond Index1 4.84 3.36 -2.47 12.91 2.38 10.70 6.78 -2.55 9.05 3.30

Fund Facts

Expense Ratio (Gross)2 1.06%
Expense Ratio (Net)2,3 1.00%
Class A Inception 05/31/2011
Distribution Frequency Monthly

Yield Information7as of Aug 31, 2016

Distribution Rate at NAV 1.67%
Taxable-Equivalent Distribution Rate at NAV 2.95%
SEC 30-day Yield 1.14%
Taxable-Equivalent SEC 30-day Yield 2.01%

Morningstar™ Ratingsas of Aug 31, 2016

Time Period Rating Rating (Load Waived) Funds in
Muni National Interm
Category
Overall **** **** 308
3 Years **** ***** 308
5 Years **** **** 268
Based on Risk-Adjusted Returns.

The Overall Morningstar Rating for a fund is derived from a weighted average of the performance figures associated with its 3-, 5- and 10-year (if applicable) Morningstar Rating metrics.

© 2016 Morningstar, Inc. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers is responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results. For each fund with at least a three-year history, Morningstar calculates a Morningstar Rating™ based on how a fund ranks on a Morningstar Risk-Adjusted Return measure against other funds in the same category. This measure takes into account variations in a fund's monthly performance after adjusting for sales loads (except for load-waived A shares) redemption fees, and the risk-free rate, placing more emphasis on downward variations and rewarding consistent performance. The top 10% of funds in each category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars and the bottom 10% receive 1 star. Load-waived A share star ratings do not include any front-end sales load and are intended for those investors who have access to such purchase terms (e.g., plan participants of a defined contribution plan). Not all A share mutual funds for which Morningstar calculates a load-waived A share star rating may actually waive their front-end sales load. Therefore, Morningstar strongly encourages investors to contact their investment professional to determine whether they are eligible to purchase the A share without paying the front load. The Morningstar Rating may differ among share classes of a mutual fund as a result of different sales loads and/or expense structure.

NAV History

Date NAV NAV Change
Sep 23, 2016 $12.21 $0.01
Sep 22, 2016 $12.20 $0.02
Sep 21, 2016 $12.18 $0.00
Sep 20, 2016 $12.18 $0.00
Sep 19, 2016 $12.18 $0.00
Sep 16, 2016 $12.18 $0.00
Sep 15, 2016 $12.18 -$0.01
Sep 14, 2016 $12.19 $0.01
Sep 13, 2016 $12.18 -$0.03
Sep 12, 2016 $12.21 -$0.02
View All

Distribution History8

Ex-Date Distribution Reinvest NAV
Aug 31, 2016 $0.01736 $12.27
Jul 29, 2016 $0.01739 $12.25
Jun 30, 2016 $0.01708 $12.27
May 31, 2016 $0.01559 $12.06
Apr 29, 2016 $0.01694 $12.05
Mar 31, 2016 $0.01627 $11.96
Feb 29, 2016 $0.01775 $11.91
Jan 29, 2016 $0.01701 $11.92
Dec 31, 2015 $0.01921 $11.77
Nov 30, 2015 $0.02086 $11.70
View All
No records in this table indicates that there has not been a distribution greater than .0001 within the past 3 years.
Fund prospectus

Capital Gain History8

Ex-Date Short-Term Long-Term Reinvest NAV
Dec 11, 2014 $0.00550 $0.00330 $11.48
No records in this table indicates that there has not been a capital gain greater than .0001 within the past 3 years.
Fund prospectus

Portfolio profile subject to change due to active management. Percentages may not total 100% due to rounding.

About Risk 

An imbalance in supply and demand in the municipal market may result in valuation uncertainties and greater volatility, less liquidity, widening credit spreads and a lack of price transparency in the market. There generally is limited public information about municipal issuers. As interest rates rise, the value of certain income investments is likely to decline. Longer-term bonds typically are more sensitive to interest-rate changes than shorter-term bonds. Investments in income securities may be affected by changes in the creditworthiness of the issuer and are subject to the risk of nonpayment of principal and interest. The value of income securities also may decline because of real or perceived concerns about the issuer's ability to make principal and interest payments. Because the Fund may invest significantly in a particular sector, the Fund share value may fluctuate more than a fund with less exposure to such sector. Investments rated below investment grade (typically referred to as "junk") are generally subject to greater price volatility and illiquidity than higher-rated investments. Derivative instruments can be used to take both long and short positions, be highly volatile, result in economic leverage (which can magnify losses), and involve risks in addition to the risks of the underlying instrument on which the derivative is based, such as counterparty, correlation and liquidity risk. If a counterparty is unable to honor its commitments, the value of Fund shares may decline and/or the Fund could experience delays in the return of collateral or other assets held by the counterparty. No Fund is a complete investment program and you may lose money investing in a Fund. The Fund may engage in other investment practices that may involve additional risks and you should review the Fund prospectus for a complete description.


Portfolio

Asset Mix (%)4,9as of Aug 31, 2016

Municipal Bonds 97.27
Cash 2.73
Total 100.00

Portfolio Statisticsas of Aug 31, 2016

Number of Holdings 453
Average Coupon 4.23%
Average Maturity 9.52 yrs.
Average Effective Maturity 7.57 yrs.
Average Duration 5.83 yrs.
Average Call 7.23 yrs.
Average Price $114.61
% Subject to AMT 9.80%

Sector Breakdown (%)4as of Aug 31, 2016

General Obligations 25.58
Hospital 20.90
Transportation 10.60
Insured-General Obligations 5.29
Other Revenue 4.53
Education 4.74
Special Tax Revenue 4.83
Electric Utilities 4.00
Industrial Development Revenue 2.90
Lease Revenue/Certificates of Participation 2.89
View All

Credit Quality (%)10as of Aug 31, 2016

AAA 8.14
AA 36.14
A 25.52
BBB 21.04
BB 3.93
B 1.25
CCC or Lower 1.13
Not Rated 2.84
Total 100.00
Ratings are based on Moody's, S&P or Fitch, as applicable. If securities are rated differently by the ratings agencies, the higher rating is applied. Ratings, which are subject to change, apply to the creditworthiness of the issuers of the underlying securities and not to the Fund or its shares. Credit ratings measure the quality of a bond based on the issuer's creditworthiness, with ratings ranging from AAA, being the highest, to D, being the lowest based on S&P's measures. Ratings of BBB or higher by S&P or Fitch (Baa or higher by Moody's) are considered to be investment-grade quality. Credit ratings are based largely on the ratings agency's analysis at the time of rating. The rating assigned to any particular security is not necessarily a reflection of the issuer's current financial condition and does not necessarily reflect its assessment of the volatility of a security's market value or of the liquidity of an investment in the security. Holdings designated as "Not Rated" are not rated by the national ratings agencies stated above.

Maturity Distribution (%)10as of Aug 31, 2016

Less Than 1 Year 3.36
1 To 3 Years 5.95
3 To 5 Years 9.88
5 To 10 Years 38.22
10 To 20 Years 39.75
20 To 30 Years 2.47
More Than 30 Years 0.36
Total 100.00

Assets by State (%)10,11as of Aug 31, 2016

New York 12.20
Illinois 12.00
California 11.32
Michigan 11.12
New Jersey 8.48
Texas 6.19
Pennsylvania 5.49
Florida 4.15
Massachusetts 3.07
Puerto Rico 2.90
View All

Fund Holdings4,12as of Jul 31, 2016

Holding Coupon Rate Maturity Date % of Net Assets
State of Illinois 5.00% 06/01/2026 2.15%
Hartford HealthCare Obligated Group 1.27% 07/01/2049 1.95%
US DOLLARS 1.85%
Lancaster Port Authority 1.03% 05/01/2038 1.43%
Presence Health Network Obligated Group 5.00% 02/15/2027 1.34%
City of West Palm Beach FL 4.00% 10/01/2035 1.32%
Chicago Midway International Airport 5.00% 01/01/2025 1.28%
City of Detroit MI 5.15% 04/01/2025 1.11%
North Orange County Community College District/CA 4.00% 08/01/2018 1.06%
Segerstrom Center for the Arts 5.00% 07/01/2026 1.03%
View All

The information included herein does not reflect securities deemed to be held by the Fund pursuant to financial accounting standard 140 (FAS 140).

Portfolio profile subject to change due to active management. Percentages may not total 100% due to rounding.

About Risk 

An imbalance in supply and demand in the municipal market may result in valuation uncertainties and greater volatility, less liquidity, widening credit spreads and a lack of price transparency in the market. There generally is limited public information about municipal issuers. As interest rates rise, the value of certain income investments is likely to decline. Longer-term bonds typically are more sensitive to interest-rate changes than shorter-term bonds. Investments in income securities may be affected by changes in the creditworthiness of the issuer and are subject to the risk of nonpayment of principal and interest. The value of income securities also may decline because of real or perceived concerns about the issuer's ability to make principal and interest payments. Because the Fund may invest significantly in a particular sector, the Fund share value may fluctuate more than a fund with less exposure to such sector. Investments rated below investment grade (typically referred to as "junk") are generally subject to greater price volatility and illiquidity than higher-rated investments. Derivative instruments can be used to take both long and short positions, be highly volatile, result in economic leverage (which can magnify losses), and involve risks in addition to the risks of the underlying instrument on which the derivative is based, such as counterparty, correlation and liquidity risk. If a counterparty is unable to honor its commitments, the value of Fund shares may decline and/or the Fund could experience delays in the return of collateral or other assets held by the counterparty. No Fund is a complete investment program and you may lose money investing in a Fund. The Fund may engage in other investment practices that may involve additional risks and you should review the Fund prospectus for a complete description.


Insights & Analysis

Commentary

A Word On The Markets as of Jun 30, 2016

The U.S. municipal bond market was positive for the second quarter of 2016, with the Barclays Municipal Bond Index1 (the Index) returning 2.61% for the three-month period. June represented the 12th straight month of positive performance for the Index.

For the quarter, muni performance was supported by strong demand from investors seeking haven from financial market volatility that persisted due to ongoing global growth concerns. While investors' appetite for risk assets, such as high-yield debt, carried over from the first quarter, volatility ramped up near the end of the quarter following weak U.S. economic data.

The unexpected "leave" result of the U.K. Brexit referendum in late June boosted demand for safe haven assets, such as U.S. Treasurys, with the yield on the 10-year Treasury finishing the quarter near record lows. Muni bonds benefited as well, due to their high correlation with Treasurys. At quarter end, the 10-year muni/Treasury ratio stood at 91%, compared to 85% at the beginning of the year; the 30-year ratio ended at 87%, compared to 94% on December 31.

The municipal yield curve flattened during the quarter, with the two-year AAA muni yield declining 9 basis points (bps) and the 30-year AAA yield falling 67bps. As a result, longer duration muni bonds outperformed their shorter duration counterparts. In terms of credit quality, below investment-grade bonds typically outperformed their higher-quality counterparts, primarily due to strength in Puerto Rico bonds. Puerto Rico bonds were among the best-performing area of the muni market despite defaults and an important July 1 payment deadline.

Technical conditions were supportive during the period. Year to-date muni bond issuance hit approximately $218 billion as of June 30, down 3% compared to the same period last year, according to Thomson Reuters. On the demand side, municipal bond funds enjoyed 39 consecutive weeks of inflows as of 6/29, according to Investment Company Institute.

Performance Summary 

Eaton Vance Municipal Opportunities Fund (the Fund) outperformed its benchmark, the Barclays Municipal Bond Index1 (the Index), at net asset value for the quarter.

  • Overweight exposure in the hospital sector – and security selection in this area – benefited Fund performance relative to the Index.
  • Overweight exposure in taxable municipal bonds also aided performance relative to the Index.
  • An overweight exposure to BBB and below investment-grade credits also aided performance relative to the Index.
  • The Fund's futures hedge hurt performance relative to the Index.
  • Exposure to defensive floating-rate notes and variable rate demand notes (VRDNs) also hurt performance relative to the Index.

    Security selection in zero coupon bonds also detracted from the Fund's performance relative to the Index.

Historical Returns (%)as of Jun 30, 2016

Annualized
1 Mo. 3 Mos. YTD 1 Yr. 3 Yrs. 5 Yrs. Life of Fund
Fund at NAV 1.88 3.01 5.12 9.55 7.62 6.95 6.84
Fund w/Max Sales Charge -2.95 -1.91 0.10 4.34 5.90 5.92 5.82
Return After Taxes on Dist w/Max Sales Charge 4.23 5.81 5.65 5.56
Return After Taxes on Dist & Sales of Fund Shares w/Max Sales Charge 3.15 4.91 4.94 4.86
Barclays Municipal Bond Index1 1.59 2.61 4.33 7.65 5.58 5.32 5.31
Past performance is no guarantee of future results. Investment return and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Performance is for the stated time period only; due to market volatility, the Fund's current performance may be lower or higher than quoted. Returns are historical and are calculated by determining the percentage change in net asset value (NAV) with all distributions reinvested. Returns for other classes of shares offered by the Fund are different. Performance less than or equal to one year is cumulative. After-tax returns are calculated using certain assumptions, including using the highest historical individual federal income tax rates, and do not reflect the impact of state/local taxes. Actual after-tax returns depend on a shareholder's tax situation and the actual characterization of distributions and may differ from those shown. After-tax returns are not relevant to shareholders who hold shares in tax-deferred accounts or shares held by nontaxable entities. Return After Taxes on Distributions may be the same as Return Before Taxes for the same period because no taxable distributions were made during that period. Return After Taxes on Distributions and Sale of Fund Shares may be greater than or equal to Return After Taxes on Distributions for the same period because of losses realized on the sale of Fund shares. Before-tax and after-tax returns for other classes of shares offered by the Fund are different. Max Sales Charge: 4.75%.

Fund Factsas of Jun 30, 2016

Class A Inception 05/31/2011
Expense Ratio (Gross)2 1.06%
Expense Ratio (Net)2,3 1.00%

Contributors 

Factors contributing to the Fund's relative performance compared to the Index during the quarter:

  • Security selection was a key driver for the Fund's outperformance of the Index for the quarter. Specifically, the Fund's holdings in the hospital sector helped performance versus the Index, as this was one of the best-performing areas of the muni bond market for the quarter.
  • The Fund's relative performance also was boosted by an overweight exposure in taxable municipal bonds. The Barclays Taxable Municipal Bond Index outpaced the Barclays Municipal Index for the quarter.
  • The Fund's larger exposure to BBB and below investment-grade credits aided performance, as they outpaced the Index. Lower-quality bonds generally outperformed higher-quality bonds for the quarter.

Detractors 

Factors detracting from the Fund's relative performance compared to the Index during the quarter:

  • The Fund's use of U.S. Treasury futures hurt performance relative to the Index. These contracts, used to hedge the Fund against rising interest rates, decreased in value during the quarter as Treasury yields fell. The Index is not hedged.
  • Some of the Fund's more defensive holdings detracted from performance relative to the Index. Exposure to floating-rate notes and VRDNs hurt results versus the Index, as long-term rates declined and the short end of the yield curve underperformed.
  • Security selection in zero coupon bonds also detracted from the Fund's performance relative to the Index.

Investment Outlook And Fund Positioning 

Absent a meaningful spike in Treasury yields, we believe the municipal market is likely to remain well-supported in the near term. The summer months are historically favorable for municipal bonds primarily due to a decline in municipal issuance, the seasonally large reinvestment of coupons and bond maturities. More importantly, with an economic environment defined by high uncertainty, low growth and muted inflation, we think this favorable supply-demand dynamic should keep a lid on yields in the near term.

Looking out over the longer term, we believe demand for munis could remain strong in an environment where economic growth is slow and financial market uncertainty persists. Given this view, we believe tax-sensitive income-seeking investors may continue to seek munis as a source of yield.

We continue to closely monitor events in Puerto Rico, particularly the important July 1 payment deadline. Additional defaults on the island's debt will likely occur in the coming months. If a default by a Puerto Rico issuer disrupts the broader muni market, we would consider any price volatility as an opportunity.

Additionally, given our flexible approach to the municipal bond market, we will continue to search for opportunities in taxable municipal bonds and insured bonds with distressed underlying credits. We will also continue to monitor activist- and event-driven opportunities, adding exposure when we think it is appropriate. Given this view, we believe that credit research will remain paramount. An experienced, skilled investment manager can help navigate the muni market during times of increased volatility.

Credit Quality (%)10as of Jun 30, 2016

AAA 8.10
AA 37.27
A 26.09
BBB 19.17
BB 3.13
B 1.29
CCC or Lower 1.52
Not Rated 3.42
Total 100.00
Ratings are based on Moody's, S&P or Fitch, as applicable. If securities are rated differently by the ratings agencies, the higher rating is applied. Ratings, which are subject to change, apply to the creditworthiness of the issuers of the underlying securities and not to the Fund or its shares. Credit ratings measure the quality of a bond based on the issuer's creditworthiness, with ratings ranging from AAA, being the highest, to D, being the lowest based on S&P's measures. Ratings of BBB or higher by S&P or Fitch (Baa or higher by Moody's) are considered to be investment-grade quality. Credit ratings are based largely on the ratings agency's analysis at the time of rating. The rating assigned to any particular security is not necessarily a reflection of the issuer's current financial condition and does not necessarily reflect its assessment of the volatility of a security's market value or of the liquidity of an investment in the security. Holdings designated as "Not Rated" are not rated by the national ratings agencies stated above.

The views expressed in this report are those of portfolio manager(s) and are current only through the date stated at the top of this page. These views are subject to change at any time based upon market or other conditions, and Eaton Vance disclaims any responsibility to update such views. These views may not be relied upon as investment advice and, because investment decisions are based on many factors, may not be relied upon as an indication of trading intent on behalf of any Eaton Vance fund. This commentary may contain statements that are not historical facts, referred to as "forward looking statements". The Fund's actual future results may differ significantly from those stated in any forward-looking statement, depending on factors such as changes in securities or financial markets or general economic conditions, the volume of sales and purchases of Fund shares, the continuation of investment advisory, administrative and service contracts, and other risks discussed from time to time in the Fund's filings with the Securities and Exchange Commission.

Portfolio profile subject to change due to active management. Percentages may not total 100% due to rounding.

The information included herein does not reflect securities deemed to be held by the Fund pursuant to financial accounting standard 140 (FAS 140).

About Risk 

An imbalance in supply and demand in the municipal market may result in valuation uncertainties and greater volatility, less liquidity, widening credit spreads and a lack of price transparency in the market. There generally is limited public information about municipal issuers. As interest rates rise, the value of certain income investments is likely to decline. Longer-term bonds typically are more sensitive to interest-rate changes than shorter-term bonds. Investments in income securities may be affected by changes in the creditworthiness of the issuer and are subject to the risk of nonpayment of principal and interest. The value of income securities also may decline because of real or perceived concerns about the issuer's ability to make principal and interest payments. Because the Fund may invest significantly in a particular sector, the Fund share value may fluctuate more than a fund with less exposure to such sector. Investments rated below investment grade (typically referred to as "junk") are generally subject to greater price volatility and illiquidity than higher-rated investments. Derivative instruments can be used to take both long and short positions, be highly volatile, result in economic leverage (which can magnify losses), and involve risks in addition to the risks of the underlying instrument on which the derivative is based, such as counterparty, correlation and liquidity risk. If a counterparty is unable to honor its commitments, the value of Fund shares may decline and/or the Fund could experience delays in the return of collateral or other assets held by the counterparty. No Fund is a complete investment program and you may lose money investing in a Fund. The Fund may engage in other investment practices that may involve additional risks and you should review the Fund prospectus for a complete description.

Attribution

No attribution information is currently available.

Portfolio profile subject to change due to active management. Percentages may not total 100% due to rounding.

About Risk 

An imbalance in supply and demand in the municipal market may result in valuation uncertainties and greater volatility, less liquidity, widening credit spreads and a lack of price transparency in the market. There generally is limited public information about municipal issuers. As interest rates rise, the value of certain income investments is likely to decline. Longer-term bonds typically are more sensitive to interest-rate changes than shorter-term bonds. Investments in income securities may be affected by changes in the creditworthiness of the issuer and are subject to the risk of nonpayment of principal and interest. The value of income securities also may decline because of real or perceived concerns about the issuer's ability to make principal and interest payments. Because the Fund may invest significantly in a particular sector, the Fund share value may fluctuate more than a fund with less exposure to such sector. Investments rated below investment grade (typically referred to as "junk") are generally subject to greater price volatility and illiquidity than higher-rated investments. Derivative instruments can be used to take both long and short positions, be highly volatile, result in economic leverage (which can magnify losses), and involve risks in addition to the risks of the underlying instrument on which the derivative is based, such as counterparty, correlation and liquidity risk. If a counterparty is unable to honor its commitments, the value of Fund shares may decline and/or the Fund could experience delays in the return of collateral or other assets held by the counterparty. No Fund is a complete investment program and you may lose money investing in a Fund. The Fund may engage in other investment practices that may involve additional risks and you should review the Fund prospectus for a complete description.


Management

Biography
Adam A. Weigold, CFA

Adam A. Weigold, CFA

Vice President, Eaton Vance Management
Joined Eaton Vance 1998

Adam Weigold is a vice president of Eaton Vance Management and senior portfolio manager on Eaton Vance’s municipal bond team. He is responsible for buy and sell decisions, portfolio construction and risk management for the firm’s municipal bond strategies. He began his career in the investment management industry with Eaton Vance in 1998.

Adam earned a B.A. from Dartmouth College and an MBA from Boston University. He is a member of the Boston Security Analysts Society and the National Federation of Municipal Analysts. He is a CFA charterholder.

Education
  • B.A. Dartmouth College
  • M.B.A. Boston University
Experience
  • Managed Fund since inception

Literature

Literature

Fact Sheet

Download - Last updated: Jun 30, 2016

Attribution

Download - Last updated: Jun 30, 2016

Annual Report

Download - Last updated: Jul 31, 2016

Full Prospectus

Download - Last updated: Dec 1, 2015

Holdings-1st or 3rd fiscal quarters-www.sec.gov

Download

Eaton Vance municipal funds' holdings in Puerto Rico debt

Download - Last updated: Jul 1, 2016

SAI

Download - Last updated: Dec 1, 2015

Think Performance Think Eaton Vance

Download - Last updated: Jun 30, 2016

Semiannual Report

Download - Last updated: Jan 31, 2016

Summary Prospectus

Download - Last updated: Dec 1, 2015

XBRL

Download - Last updated: Dec 1, 2015