Eaton Vance — Q3 2026 Earnings Presentation
40 slides from Eaton Vance's earnings presentation, 2026
Slide 1: Emerging Markets Debt Monitor
Emerging Markets Debt Monitor Emerging Markets Investment Team Q3 2026
Slide 2: Important Information and Disclosure
Important Information and Disclosure The views and opinions and/or analysis expressed are those of the author or the investment team as of the date of preparation of this material and are subject to change at any time without notice due to market or economic conditions and may not necessarily come t
Slide 3: Table of Contents
Table of Contents Q3 2026 ROTATING Q4 2026 EM INTEREST EM FX RECAP TOPIC OUTLOOK RATES 4 11 16 19 22 EM SOVEREIGN EM CORPORATE CREDIT CREDIT 26 31 26 31 If you are viewing this book on your computer or tablet, click or tap on the title box to jump to the beginning of each section. Data provided is f
Slide 4: Q3 2026 Recap
= Eaton Vance Q3 2026 Recap
Slide 5: Q3 2026 Recap
Q3 2026 RECAP Q3 2026 Recap • Emerging markets debt delivered mixed performance in the third quarter, with a challenging September ultimately pushing returns into negative territory. A strengthening U.S. economy and tighter labor market shifted expectations toward Fed tightening, pushing U.S. Treasu
Slide 6: Q3 2026 Recap, continued
Q3 2026 RECAP Q3 2026 Recap, continued ASIA • Vietnam’s reform story is still quite positive, although the quarter exposed growing concerns about how quickly the system can adjust to the government’s growth ambitions. The agenda is focused on credit growth and increased infrastructure spending, but
Slide 7: EM Corporate Credit – Q3 Update and Outlook
Q3 2026 RECAP EM Corporate Credit – Q3 Update and Outlook HIGHLIGHTS DURING THE QUARTER AND YEAR: Investment grade corporates underperformed high yield, returning -2.3% versus -1.1%, respectively, given their greater sensitivity to U.S. interest rates. The CEMBI index continues to demonstrate lower
Slide 8: Index Performance Recap
Q3 2026 RECAP Index Performance Recap Q3 2026 1.0% -1.0% -3.0% -5.0% J.P. Morgan GBI-EM J.P. Morgan EMBI J.P. Morgan CEMBI Global Diversified Global Diversified Broad Diversified U.S. Treasury Corporate Credit Spread Sovereign Credit Spread Carry Rates EURUSD FX EurUsd Sovereign Corporate Exchange C
Slide 9: Index Performance Recap
Q3 2026 RECAP Index Performance Recap Q3 2026 EurUsd Sovereign Corporate Exchange Credit Credit U.S. Total Index FX Rate Move Rates Carry Spread Spread Treasury Return J.P. Morgan GBI-EM Global Diversified -0.49% -0.16% -1.77% 1.47% — — — -0.94% J.P. Morgan EMBI Global Diversified — — — — -0.17% 0.0
Slide 10: Technical: 2026 YTD Flows
Q3 2026 RECAP Technical: 2026 YTD Flows Annual Cumulative Bond Flows • Inflows remained strong for July and August but were met with US$ billions headwinds in the last three weeks of the quarter. Hard currency funds 60 US$ billions 33.7 saw consistent outflows over that period while local currency f
Slide 11: Rotating Topic: LatAm Elections: The Right Gains Ground
Rotating Topic LatAm Elections: The Right Gains Ground
Slide 12: Peru Election: Strong Fundamentals Meet a More Stable Political Landscape
ROTATING TOPIC Peru Election: Strong Fundamentals Meet a More Stable Post-Election Political Landscape Stronger institutional guardrails and reduced fragmentation improve prospects for policy continuity and macro stability. Prolonged Political Outlook Instability • Economic Management: Growth remain
Slide 13: Colombia Election: Market Relief, but Fiscal Delivery Remains the Test
ROTATING TOPIC Colombia Election: Market Relief, but Fiscal Delivery Remains the Test Colombia entered the election facing fiscal challenges, concerns over institutional independence and weak investor confidence, with significant implications for future economic policy. What was at stake Reform focu
Slide 14: Colombia Election Continued
ROTATING TOPIC Colombia Election Continued: The election reduced institutional risk, but the durability of the market rerating depends on credible fiscal repair and coalition execution. Reform Focus Under ADLE Continued Outlook for ADLE -Broader multi-year adjustments will be needed to restore • Ele
Slide 15: Brazil First Round Election
ROTATING TOPIC Brazil First Round Election: Flávio Bolsonaro’s stronger-than-expected first-round performance in Brazil’s presidential election reinforced the recent shift toward right-leaning governments across Latin America Brazil: Surprise Momentum on the Right Assets Rallied in Response • BRL ap
Slide 16: Q4 2026 Outlook
= Eaton Vance Q4 2026 Outlook
Slide 17: Q4 2026 Outlook
Q4 2026 OUTLOOK Q4 2026 Outlook MACRO DRIVERS COUNTRY DRIVERS • The shift away from global monetary easing is expected to continue as resilient U.S. • Despite a more challenging global backdrop, improving country-level fundamentals growth and persistent inflation increase the likelihood of Fed tight
Slide 18: EMD Risk Factor Dashboard
Q4 2026 OUTLOOK EMD Risk Factor Dashboard Outlook and Summary Moderate Moderate Underweight Underweight Neutral Overweight Overweight Summary We keep currencies at a moderate overweight. The macro environment has turned less supportive on the margin Currency with U.S. rates repriced higher and gro
Slide 19: EM FX
EM FX
Slide 20: EM currency weakness in September
EM FX EM currency weakness in September, driven by a more hawkish Fed, a sharp reversal in the U.S. dollar, and higher oil prices, was sufficient to offset the currency strength seen earlier in the quarter. Nominal FX Index Weight: Nominal FX (in GBI-EM Index) has weakened 110.0 significantly since
Slide 21: External factors weighed on many EM currencies
EM FX External factors weighed on many EM currencies. Kazakhstan, Nigeria and Colombia were among the bright spots, benefiting from improving fiscal balances, continued reform momentum and support from elevated oil prices. FX QoQ Change vs USD 10% 6% 2% -2% -6% -10% Source: Bloomberg, Morgan Stanley
Slide 22: EM Interest Rates
= Eaton Vance EM Interest Rates
Slide 23: EM inflation expectations declined through much of Q3
EM INTEREST RATES EM inflation expectations declined through much of Q3 as moderating price pressures and credible monetary policy helped contain the impact of elevated energy prices. Expectations edged higher in September amid renewed geopolitical tensions but remained relatively well anchored desp
Slide 24: EM consensus policy rate expectations rose during the third quarter
EM INTEREST RATES Despite increasingly divergent policy paths, EM consensus policy rate expectations rose during the third quarter as resilient U.S. growth and renewed inflation concerns from higher energy prices reduced expectations for further easing. EM Consensus Policy Rate Expectations 1 8.00 7
Slide 25: Real yield differentials between EM and DM narrowed
EM INTEREST RATES Real yield differentials between EM and DM narrowed during the third quarter as developed market yields rose more sharply amid a hawkish shift in global monetary policy expectations. Despite the compression, EM real yields remained relatively attractive, providing continued support
Slide 26: EM Sovereign Credit
= Eaton Vance EM Sovereign Credit
Slide 27: 5-Year Equal Weight Sovereign Spread
EM SOVEREIGN CREDIT • Credit spreads held on well through 5-Year Equal Weight Sovereign Spread most of September, but asset class bps outflows combined with idiosyncratic 1,000 country-level developments led to marginal widening in the back half of the month. 800 • Notable bifurcation remains in the
Slide 28: Sovereign spreads by region and credit quality
EM SOVEREIGN CREDIT Spread levels tightened for both investment grade and high yield Spreads held on relatively well through September volatility, but issuers for most of the quarter but both segments widened during across regions marginally widened during the last few days of the the last few days
Slide 29: Q3 2026 Change in 5-Year Spread
EM SOVEREIGN CREDIT Sovereign credit performance remained differentiated, with Mozambique benefiting from improving prospects for LNG investment and future export revenues, while Ukraine faced renewed pressure from the prolonged war, elevated financing needs and uncertainty around continued internat
Slide 30: 5-Year Spreads
EM SOVEREIGN CREDIT Variance among issuers increased while the bifurcation based on issuer credit quality remained notable. 5-Year Spreads 2,000 1,800 1,600 1,400 1,200 1,000 800 600 400 200 0 Ukraine Costa Rica Oman Peru Turkey Jordan Armenia Panama Qatar Senegal Mongolia Honduras Bermuda Jamaica H
Slide 31: EM Corporate Credit
= Eaton Vance EM Corporate Credit
Slide 32: Investor Base
EM CORPORATE CREDIT Investor Base EM Corporate Debt Market is Unique Because of its Disparate Buyer Base • The market attracts capital from a diverse mix of Unidentified investors with various mandates from EM sovereign and global corporate strategies to local pension funds and private banks. • Whil
Slide 33: Our Approach
EM CORPORATE CREDIT Our Approach • We decompose risk premia into three components: U.S. treasury, sovereign-induced corporate credit (SICR), and corporate spread over sovereign spread. • We believe our proprietary SICR method most accurately isolates sovereign credit risk premium from corporate risk
Slide 34: Valuations
EM CORPORATE CREDIT Valuations Overall, EM corporate credit proved relatively resilient in Q3 2026 despite negative total returns, with the CEMBI Broad Diversified down 1.83%. The U.S.-Iran conflict and elevated oil prices kept inflation and Treasury yields under pressure, but corporate fundamentals
Slide 35: Sector Spread Changes
EM CORPORATE CREDIT Sector Spread Changes The chart below highlights spread moves within the corporate asset class bucketed by country-sector (weighting is in parentheses) Q3 Top Country-Sector Spread Changes 1,509 Israel TMT (0.32%) 801 Ukraine Metals & Mining (0.13%) 447 Colombia Transport (0.26%)
Slide 36: Risk Considerations
IMPORTANT ADDITIONAL INFORMATION Risk Considerations RISK CONSIDERATIONS There is no assurance that a Portfolio will achieve its investment objective. Portfolios are subject to market risk, which is the possibility that the market values of securities owned by the Portfolio will decline and may ther
Slide 37: Risk Considerations
IMPORTANT ADDITIONAL INFORMATION Risk Considerations ABOUT ASSET CLASS COMPARISONS: Credit ratings that may be referenced are based on Moody's, S&P or Fitch, as applicable. Credit ratings are based largely on the rating agency's investment analysis at the time of rating and the rating assigned Eleme
Slide 38: Important Additional Information
IMPORTANT ADDITIONAL INFORMATION The views and opinions and/or analysis expressed are those of the author or the investment team as of The information herein has not been based on a consideration of any individual investor circumstances the date of preparation of this material and are subject to cha
Slide 39: Important Additional Information
IMPORTANT ADDITIONAL INFORMATION DISTRIBUTION Italy: MSIM FMIL (Milan Branch), (Sede Secondaria di Milano) Saudi Arabia: This financial promotion was issued and approved for Palazzo Serbelloni Corso Venezia, 16 20121 Milano, Italy. The use in Saudi Arabia by Morgan Stanley Saudi Arabia, Al Rashid Th
Slide 40: Important Additional Information
IMPORTANT ADDITIONAL INFORMATION Japan ASIA PACIFIC For professional investors, this material is circulated or distributed Hong Kong: This document has been issued by Morgan Stanley Asia solely for informational purposes. For non-professional investors, this Limited, CE No. AAD291, for use in Hong K