Overview

Strong Morningstar Ratings as of 06/30/2017.1

Historical Returns (%)as of Jun 30, 2017

Annualized
1 Mo. 3 Mos. YTD 1 Yr. 3 Yrs. 5 Yrs. Life of Fund
07/31/2017
Fund at NAV 0.84 2.04 4.75 0.04 4.37 3.85 5.61
Fund w/Max Sales Charge -3.93 -2.83 -0.26 -4.71 2.69 2.85 4.77
Return After Taxes on Dist w/Max Sales Charge -5.02 2.50 2.56 4.50
Return After Taxes on Dist & Sales of Fund Shares w/Max Sales Charge -2.00 2.35 2.47 4.04
Bloomberg Barclays Municipal Bond Index2 0.81 2.04 4.40 0.26 3.55 3.10 4.41
06/30/2017
Fund at NAV -0.25 2.24 3.88 -0.81 4.14 4.15 5.54
Fund w/Max Sales Charge -4.95 -2.60 -1.09 -5.51 2.46 3.14 4.70
Return After Taxes on Dist w/Max Sales Charge -5.82 2.27 2.85 4.43
Return After Taxes on Dist & Sales of Fund Shares w/Max Sales Charge -2.46 2.17 2.71 3.98
Bloomberg Barclays Municipal Bond Index2 -0.36 1.96 3.57 -0.49 3.33 3.26 4.33
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 Jul 31, 2017

Class A Inception 05/31/2011
Investment Objective Maximize after-tax total return
Total Net Assets $796.1M
Minimum Investment $1000
Expense Ratio3 0.97%
CUSIP 27826Y571

Top 10 Holdings (%)4,5as of Jul 31, 2017

State of Illinois
State of California
Hartford HealthCare Obligated Group
Nuveen AMT-Free Quality Municipal Income Fund
New York City Water Sewer System
Care New England Health System
State of Illinois
Metropolitan Transportation Authority
University of California
Triborough Bridge Tunnel Authority
Total 15.65

Morningstar Rating™as of Jul 31, 2017

Time Period Rating Funds in
Muni National Interm
Category
Overall **** 262
3 Years **** 262
5 Years **** 226
The Morningstar Rating™ for funds, or "star rating", is calculated for managed products (including mutual funds and exchange-traded funds) with at least a three-year history. Exchange-traded funds and open-ended mutual funds are considered a single population for comparative purposes. It is calculated based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a managed product's monthly excess performance, placing more emphasis on downward variations and rewarding consistent performance. The top 10% of products in each product 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.

The Overall Morningstar Rating for a managed product is derived from a weighted average of the performance figures associated with its three-, five-, and 10-year (if applicable) Morningstar Rating metrics. The weights are: 100% three-year rating for 36-59 months of total returns, 60% five-year rating/40% three-year rating for 60-119 months of total returns, and 50% 10-year rating/30% five-year rating/20% three-year rating for 120 or more months of total returns. While the 10-year overall star rating formula seems to give the most weight to the 10-year period, the most recent three-year period actually has the greatest impact because it is included in all three rating periods. Star ratings do not reflect the effect of any applicable sales load.

©2017 Morningstar. 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 are responsible for any damages or losses arising from any use of this information.

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 increase both the risk and return potential of the Fund), 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, 2017

Annualized
1 Mo. 3 Mos. YTD 1 Yr. 3 Yrs. 5 Yrs. Life of Fund
07/31/2017
Fund at NAV 0.84 2.04 4.75 0.04 4.37 3.85 5.61
Fund w/Max Sales Charge -3.93 -2.83 -0.26 -4.71 2.69 2.85 4.77
Return After Taxes on Dist w/Max Sales Charge -5.02 2.50 2.56 4.50
Return After Taxes on Dist & Sales of Fund Shares w/Max Sales Charge -2.00 2.35 2.47 4.04
Bloomberg Barclays Municipal Bond Index2 0.81 2.04 4.40 0.26 3.55 3.10 4.41
Morningstar Muni National Interm Category6 0.63 1.63 3.71 -0.18 2.69 2.36
06/30/2017
Fund at NAV -0.25 2.24 3.88 -0.81 4.14 4.15 5.54
Fund w/Max Sales Charge -4.95 -2.60 -1.09 -5.51 2.46 3.14 4.70
Return After Taxes on Dist w/Max Sales Charge -5.82 2.27 2.85 4.43
Return After Taxes on Dist & Sales of Fund Shares w/Max Sales Charge -2.46 2.17 2.71 3.98
Bloomberg Barclays Municipal Bond Index2 -0.36 1.96 3.57 -0.49 3.33 3.26 4.33
Morningstar Muni National Interm Category6 -0.30 1.70 3.06 -0.82 2.53 2.54
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 (%)

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Fund at NAV 9.17 -4.99 14.15 4.03 0.38
Bloomberg Barclays Municipal Bond Index2 3.36 -2.47 12.91 2.38 10.70 6.78 -2.55 9.05 3.30 0.25

Fund Facts

Expense Ratio3 0.97%
Class A Inception 05/31/2011
Distribution Frequency Monthly

Yield Information7as of Jul 31, 2017

Distribution Rate at NAV 1.91%
Taxable-Equivalent Distribution Rate at NAV8 3.37%
SEC 30-day Yield 1.55%
Taxable-Equivalent SEC 30-day Yield 2.73%

Morningstar Rating™as of Jul 31, 2017

Time Period Rating Funds in
Muni National Interm
Category
Overall **** 262
3 Years **** 262
5 Years **** 226
The Morningstar Rating™ for funds, or "star rating", is calculated for managed products (including mutual funds and exchange-traded funds) with at least a three-year history. Exchange-traded funds and open-ended mutual funds are considered a single population for comparative purposes. It is calculated based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a managed product's monthly excess performance, placing more emphasis on downward variations and rewarding consistent performance. The top 10% of products in each product 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.

The Overall Morningstar Rating for a managed product is derived from a weighted average of the performance figures associated with its three-, five-, and 10-year (if applicable) Morningstar Rating metrics. The weights are: 100% three-year rating for 36-59 months of total returns, 60% five-year rating/40% three-year rating for 60-119 months of total returns, and 50% 10-year rating/30% five-year rating/20% three-year rating for 120 or more months of total returns. While the 10-year overall star rating formula seems to give the most weight to the 10-year period, the most recent three-year period actually has the greatest impact because it is included in all three rating periods. Star ratings do not reflect the effect of any applicable sales load.

©2017 Morningstar. 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 are responsible for any damages or losses arising from any use of this information.

NAV History

Date NAV NAV Change
Aug 17, 2017 $12.01 $0.01
Aug 16, 2017 $12.00 $0.00
Aug 15, 2017 $12.00 -$0.02
Aug 14, 2017 $12.02 $0.00
Aug 11, 2017 $12.02 $0.01
Aug 10, 2017 $12.01 $0.02
Aug 09, 2017 $11.99 $0.00
Aug 08, 2017 $11.99 $0.01
Aug 07, 2017 $11.98 $0.00
Aug 04, 2017 $11.98 -$0.01

Distribution History9

Ex-Date Distribution Reinvest NAV
Jul 31, 2017 $0.01938 $11.96
Jun 30, 2017 $0.02010 $11.88
May 31, 2017 $0.02000 $11.93
Apr 28, 2017 $0.02115 $11.78
Mar 31, 2017 $0.02199 $11.68
Feb 28, 2017 $0.02251 $11.65
Jan 31, 2017 $0.02044 $11.59
Dec 30, 2016 $0.01998 $11.56
Nov 30, 2016 $0.01848 $11.54
Oct 31, 2016 $0.01712 $12.07
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 History9

Ex-Date Short-Term Long-Term Reinvest NAV
Dec 01, 2016 $0.05060 $11.42
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 increase both the risk and return potential of the Fund), 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 (%)4,10as of Jul 31, 2017

Municipal Bonds 95.62
Municipal Closed End Fund 1.62
U.S. Corporate Bonds 1.48
Cash 1.28
Total 100.00

Portfolio Statisticsas of Jul 31, 2017

Number of Holdings 462
Average Coupon 4.06%
Average Maturity 8.83 yrs.
Average Effective Maturity 6.36 yrs.
Average Duration 4.43 yrs.
Average Call 6.22 yrs.
Average Price $109.71
% Subject to AMT 9.68%

Sector Breakdown (%)4as of Jul 31, 2017

General Obligations 23.89
Hospital 22.06
Transportation 10.65
Education 5.34
Senior Living/Life Care 5.18
Insured-General Obligations 4.71
Special Tax Revenue 4.26
Other Revenue 3.79
Industrial Development Revenue 3.47
Insured-Transportation 3.07
View All

Credit Quality (%)11as of Jul 31, 2017

AAA 7.01
AA 33.73
A 23.79
BBB 25.77
BB 2.22
CCC or Lower 2.08
Not Rated 5.40
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 (%)11as of Jul 31, 2017

Less Than 1 Year 7.44
1 To 3 Years 7.49
3 To 5 Years 5.94
5 To 10 Years 49.04
10 To 20 Years 26.84
20 To 30 Years 3.26
More Than 30 Years 0.00
Total 100.00

Assets by State (%)11,12as of Jul 31, 2017

New York 16.27
Illinois 15.30
California 10.59
Michigan 8.59
New Jersey 7.25
Texas 5.73
Connecticut 3.66
Pennsylvania 3.30
Puerto Rico 2.62
Florida 2.54
View All

Fund Holdings4,13as of Jun 30, 2017

Holding Coupon Rate Maturity Date % of Net Assets
State of California 5.00% 08/01/2026 2.06%
State of Illinois 5.00% 02/01/2028 2.04%
Hartford HealthCare Obligated Group 1.66% 07/01/2049 1.77%
Nuveen AMT-Free Quality Municipal Income Fund 0.00% 1.67%
New York City Water Sewer System 0.95% 06/15/2049 1.63%
Care New England Health System 5.50% 09/01/2026 1.54%
Metropolitan Transportation Authority 0.93% 11/01/2035 1.44%
State of Illinois 5.00% 02/01/2025 1.38%
Triborough Bridge Tunnel Authority 1.40% 01/01/2032 1.30%
Metropolitan Transportation Authority 1.36% 11/01/2026 1.29%
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 increase both the risk and return potential of the Fund), 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, 2017

The U.S. municipal bond market posted positive returns for the second quarter of 2017, with the Bloomberg Barclays Municipal Bond Index (the Index)2 returning 1.96% for the three-month period. After stabilizing during the first quarter, the municipal market rallied as confidence in the Trump administration's ability to deliver fiscal stimulus faded. This loss in confidence also resulted in a shift in performance leadership during the quarter as longer term municipals outperformed significantly after lagging throughout the first three months of the year.

After trending steeper for three consecutive quarters, the municipal yield curve flattened as two-year yields increased four basis points (bps) and 30-year yields decreased 26 bps. In comparison, short-term Treasury yields increased more (13 bps increase in 2-year yields) and longer-term yields decreased less (18 bps decrease in 30-year yields). As a result, muni-to-Treasury ratios richened significantly in the 2-, 5- and 10-year part of the yield curve, and to a lesser extent the 30-year portion.

In terms of credit quality, BBB and A-rated municipals outperformed their higher quality counterparts for the three-month period. Single A credits were the best-performing credit quality in the index, returning 2.2%, followed closely by a 2.1% return for BBB-rated securities. The Bloomberg Barclays High Yield Municipal Bond Index14 returned 2.0% after a 4.1% return during the first three months of the year. Within the high yield universe, the tobacco sector continued is dramatic outperformance, returning 4.8% during the quarter. In contrast, the high yield muni index was hampered by Puerto Rico credits, which were down 7.33%.

The weakness in Puerto Rico was driven by the Commonwealth's decision to file for Title III bankruptcy protection on May 1, which is similar to Chapter 9 municipal bankruptcy. Through June, nine unique Puerto Rico issuers had defaulted on their debt, with the total amount of missed payments totaling approximately $2.4 billion. Additional defaults will likely occur, and the Oversight Board process is likely to be very long, with initial debt restructuring decisions likely not made until late 2017. By some estimates, the Board could be in place for at least a decade.

Finally, from a supply and demand standpoint, municipal technicals improved throughout the quarter. Demand for municipals generally increased and mutual fund inflows accelerated during the quarter as interest rates declined and investors became more comfortable increasing exposure further out on the yield curve. Following the record new deal activity during 2016, issuance during the first half of 2017 declined approximately 14%. Year-to-date issuance stands at $195 billion, compared to $227 billion during the first six months of 2016.

Performance Summary 

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

  • Overweight exposure and security selection within the healthcare sector bolstered relative performance.
  • Security selection in municipal bonds in Michigan aided performance as bonds in the portfolio outperformed similar bonds in the Index.
  • An underweight exposure to bonds with maturities greater than 15 years detracted from relative performance.
  • The Fund's security selection within the electric sector diminished relative performance as bonds in the portfolio underperformed similar bonds in the Index.

Historical Returns (%)as of Jun 30, 2017

Annualized
1 Mo. 3 Mos. YTD 1 Yr. 3 Yrs. 5 Yrs. Life of Fund
Fund at NAV -0.25 2.24 3.88 -0.81 4.14 4.15 5.54
Fund w/Max Sales Charge -4.95 -2.60 -1.09 -5.51 2.46 3.14 4.70
Return After Taxes on Dist w/Max Sales Charge -5.82 2.27 2.85 4.43
Return After Taxes on Dist & Sales of Fund Shares w/Max Sales Charge -2.46 2.17 2.71 3.98
Bloomberg Barclays Municipal Bond Index2 -0.36 1.96 3.57 -0.49 3.33 3.26 4.33
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, 2017

Class A Inception 05/31/2011
Expense Ratio3 0.97%

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 for the quarter. Specifically, the Fund's overweight position and security selection within the healthcare sector contributed significantly to relative performance.
  • The Fund's performance compared to the Index also was boosted by an overweight exposure in the Local General Obligations sector of the Index.

Detractors 

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

  • The Fund's underweight exposure to long municipal bonds diminished relative performance as longer dated bonds outperformed during the quarter.
  • The Fund's security selection within the electric sector detracted from relative performance as the bonds in the Fund did not perform as well as similar bonds in the Index.

Investment Outlook And Fund Positioning 

The historic move higher in rates during the fourth quarter of 2016 created an opportunity to lock in higher yields and potentially generate higher future returns. With municipal yields still significantly higher than their post-Brexit lows 12 months ago, we believe this opportunity remains in place.

Municipal demand should increase significantly during the summer months due to elevated levels of coupon payments and redemptions, while issuance is expected to be lower due to a drop in refunding deals. As a result of the favorable technical environment, municipals are poised to perform well despite lower ratios relative to Treasurys.

Though additional details will likely be forthcoming, the municipal market's initial reaction to details of President Trump's tax cut proposal was fairly muted and coincided with the pickup in demand during the quarter. We believe this reflects the view that munis will still play a key role in long-term portfolios even if the proposed changes to the tax code are enacted.

Finally, from an overall portfolio perspective, municipals continue to offer tax-free yield with lower risk, given the lack of correlation to other asset classes. With equity markets near all-time highs, munis may offer an attractive opportunity for core capital with a focus on principal preservation.15

Credit Quality (%)11as of Jun 30, 2017

AAA 5.36
AA 33.84
A 24.86
BBB 26.58
BB 2.31
CCC or Lower 2.18
Not Rated 4.86
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 increase both the risk and return potential of the Fund), 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 increase both the risk and return potential of the Fund), 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, 2017

Fact Sheet

Download - Last updated: Jun 30, 2017

Commentary

Download - Last updated: Jun 30, 2017

Attribution

Download - Last updated: Jun 30, 2017

Annual Report

Download - Last updated: Jul 31, 2016

Municipal Market Chart book

Download - Last updated: Jul 7, 2017

Full Prospectus

Download - Last updated: Dec 1, 2016

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

Download

SAI

Download - Last updated: Dec 1, 2016

Semiannual Report

Download - Last updated: Jan 31, 2017

Summary Prospectus

Download - Last updated: Apr 10, 2017

XBRL

Download - Last updated: Dec 15, 2016