Eaton Vance — Investor Presentation (September 2026)
38 slides from Eaton Vance's investor presentation, Sep 30, 2026
Slide 1: Municipal Bond Market Monitor
Municipal Bond Market Monitor Municipal Bond Investment Team September 30, 2026
Slide 2: Macro Outlook
Macro Outlook
Slide 3: The 10-Year Treasury is at its highest level in 19 years
The 10-Year Treasury is at its highest level in 19 years Bloomberg 10-Year US Treasury Bond Index Yield-to-Worst 8 7 6 5.28% Yield (%) 5 4 3 2 1 0 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 Source: Bloomberg as of 9/30/2026 Data is for informational use only. Past performance is
Slide 4: Job growth has slowed as unemployment rises
Job growth has slowed as unemployment rises Monthly Payrolls and Unemployment Rate (%) 300 5.00 250 237 228 Monthly Payroll Change (Thousands) 214 206 Unemployment Rate (%) 200 4.50 175 156 159 155 160 154 148 150 134 133 127 108 100 87 4.00 64 78 76 67 64 63 53 50 42 41 33 31 29 21 9 13 0 3.50 -20
Slide 5: Inflation readings have steadied, but still above the Fed's target
Inflation readings have steadied, but still above the Fed’s target Consumer Price Index (CPI) and Core CPI (%) 10.00 9.00 US CPI 8.00 US Core CPI 7.00 Percent (%) 6.00 5.00 4.00 3.00 2.00 1.00 0.00 Aug-21 Feb-22 Aug-22 Feb-23 Aug-23 Feb-24 Aug-24 Feb-25 Aug-25 Feb-26 Aug-26 Source: Bloomberg as of 9
Slide 6: US Economic Growth is Sluggish, but Positive
US Economic Growth is Sluggish, but Positive GDP US Chained Dollars (Quarter over Quarter) 10.00 8.00 7.0 6.2 6.00 5.2 4.6 4.6 4.7 4.4 4.2 3.8 4.00 3.3 3.3 3.4 3.3 3.4 3.6 3.3 3.2 2.8 2.9 GDP (%) 2.6 2.7 2.4 2.4 2.5 2.5 2.3 2.2 2.3 2.2 2.0 2.1 2.1 1.8 1.9 2.00 1.3 1.5 1.2 0.8 0.6 0.6 0.5 0.00 -0.6 -
Slide 7: Markets price a higher rate path than the Fed projects
Markets price a higher rate path than the Fed projects US Federal Reserve - Central Bank Policy Rate Upper Bound PLUS Futures-implied and FOMC Expectations U.S. Federal Reserve Upper Bound FOMC Dot Plot (Year End) Fed Funds Futures 8% 7% 6% Yield (%) 5% 4.84% by July ‘27 4% 3% Long Run 3.25% 2% 1% 0
Slide 8: As the yield curve remains steep, money market assets may seek a new home
As the yield curve remains steep, money market assets may seek a new home ICI Money Market Funds Total Net Assets 8500 8000 7500 7000 Billions ($) 6500 6000 5500 5000 4500 4000 2021 2022 2023 2024 2025 2026 Source: Bloomberg as of 9/30/2026. Data provided is for informational use only. Past performa
Slide 9: Equity Risk Premium - Bonds look more attractive as stocks appear overvalued
Equity Risk Premium - Bonds look more attractive as stocks appear overvalued Equity Risk Premium 1,000 800 Higher: Stocks undervalued relative to Bonds 600 Average Basis Points 400 200 0 Lower: Stocks overvalued relative to Bonds -200 -400 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19
Slide 10: Municipal Market Update
Municipal Market Update
Slide 11: September Municipal Market Review
September Municipal Market Review MUNICIPAL INDICIES CONTINUED THEIR DOWNTREND IN SEPTEMBER. SEPTEMBER 2026 RETURNS: • Muni Bond Index: -4.36% | HY Muni Index: -4.31% | Taxable Muni Index: -3.18% • US Treasury: -2.24% | Corporate: -2.72% YIELDS ACROSS THE MUNICIPAL CURVE WERE HIGHER IN SEPTEMBER. Se
Slide 12: Municipal supply totalled a record $52bn in September
Municipal supply totalled a record $52bn in September Municipal Bond Issuance 600,000 580,000 514,000 500,000 470,455 463,690 448,000 428,005 409,945 411,112 400,000 360,985 365,210 Millions ($) 318,028 300,000 200,000 100,000 0 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 Source: LSEG Ref
Slide 13: Top State issuance and year over year change (%)
Top 12 State issuance and year over year change (%) Municipal Bond Issuance $10bn -8% $12bn $43bn +32% -11% $16bn +10% $16bn $14bn +21% $14bn +17% +35% $68.7bn +7% $21bn $9.1bn $61bn +105% -3% 0% $20bn +11% Source: Bloomberg as of 9/30/26 Municipal Bond Market Monitor | September 2026 12
Slide 14: ETF's saw $11.5bn of inflows in September, while mutual funds saw $6.3bn of outflows
ETF’s saw $11.5bn of inflows in September, while mutual funds saw $6.3bn of outflows Muni Fund Flows By Category YTD Municipal Fund Flows ($Bn) 80 74.9 70 66.2 60 50 46.6 43.8 $(bn) 40 30 28.3 20 18.2 8.8 10 7.3 5.6 0 All Term Muni Open-End Fund ETF Investment High Long Term Intermediate Short/ Shor
Slide 15: September's sell off leaves all curve segments negative for the quarter
September’s sell off leaves all curve segments negative for the quarter, and only the 1-year segment positive YTD Bloomberg Municipal Bond Index Returns YTD and QTD 5.0% 2.5% 0.54% 0.0% -0.85% -0.81% -2.5% -2.09% -2.51% -3.55% -3.87% -5.0% -4.67% -5.04% -5.01% -5.02% -6.07% -6.15% -7.5% -8.28% -8.68
Slide 16: US fixed income sectors were hit hard in September
US fixed income sectors were hit hard in September, with only high yield corporates now positive for the year Fixed Income Index Returns YTD and in QTD 3% 2% 1% 0.1% 0% -1% -2% -1.8% -1.7% -3% -2.6% -2.9% -3.1% -3.3% -3.3% -3.4% -3.5% -4% -3.9% -4.2% -4.4% -4.3% -5% -6% -5.6% -6.4% -7% High Yield Co
Slide 17: Municipal yields remain attractive relative to fixed income alternatives
Municipal yields remain attractive relative to fixed income alternatives Yield-to-Worst (%) and Taxable Equivalent Yield for Municipal Indices 10.5% 8.4% 8.1% 6.0% 6.0% 5.8% 5.6% 5.1% High Yield Municipal High Yield Corporates Municipal Corporates US MBS Taxable Municipal US Aggregrate US Treasury S
Slide 18: Yields surged higher in September
Yields surged higher in September AAA MMD Municipal Curve 5.50 9/30/2026 12/31/2025 5.00 YTD Yield Maturity Year Change (bps) 4.50 Yield (%) 2-Year +115 4.00 5-Year +133 3.50 10-Year +134 3.00 15-Year +128 2.50 20-Year +93 2.00 16YR 18YR 10YR 11YR 12YR 13YR 14YR 15YR 17YR 19YR 20YR 21YR 22YR 23YR 24
Slide 19: All segments of the municipal curve look attractive on a taxable-equivalent yield basis
All segments of the municipal curve look attractive on a taxable-equivalent yield basis, with the 10-20 year segment still exhibiting attractive steepness The Intermediate and Long Curve Segments Remain Attractive Relative to Treasuries 9.5% AAA Taxable-Equivalent Muni Curve Treasury Curve 8.67 8.5%
Slide 20: Investment grade performance ended 2025 in-line with 25-year average
Investment grade performance ended 2025 in-line with 25-year average due to strong second half Bloomberg Municipal Bond Index Calendar Year Returns U.S. Credit Rating Downgrade Enron/WorldCom Scandals 9/11 Fed 4.3% Avg. 12.9% 11.7% Attacks Extended Fed Hiking Cycle COVID-19 Rate Annualized 9.6% 10.7
Slide 21: Current Market Opportunities
Current Market Opportunities
Slide 22: Yields are at Decade Highs
Yields are at Decade Highs: Municipal index yields are 210 basis points above the 10-year average Municipal Index Yield-to-Worst 4.80% 5 Index Yield to Worst 10-Year Average 4 3 Yield (%) 2 1 0 9/30/2016 9/30/2017 9/30/2018 9/30/2019 9/30/2020 9/30/2021 9/30/2022 9/30/2023 9/30/2024 9/30/2025 9/30/2
Slide 23: Yields are Elevated: 20-Year Muni Yields well over 5%
Yields are Elevated: 20 Year Muni Yields elevated to well over 5% at the end of September Bloomberg Municipal Benchmark 20-Year Index Yield-to-Worst (%) 6.00 5.31% 5.00 4.00 Yield (%) 3.00 2.00 1.00 0.00 Source: Bloomberg as of 9/30/2026. Index data based on Bloomberg BVAL Benchmark 20-Year Municipa
Slide 24: Yields are Elevated vs. historical averages
Yields are Elevated: Current yield levels in municipals are elevated vs. historical averages Bloomberg Municipal Indices Yield-to-Worst vs 5-, 10- and 20-Year Averages Investment grade municipals Taxable Equivalent Yield High yield municipals Taxable Equivalent Yield (YTW) (YTW) 9% 11% 10.48% 10.02%
Slide 25: Starting Yields Matter: Locking in current interest rates
Starting Yields Matter: Locking in current interest rates can provide an income “cushion” and potentially higher returns HISTORICAL FORWARD RETURNS DEPENDING ON STARTING INDEX YIELDS Lock in today’s interest rate environment for income “cushion” and potentially higher returns Average 12-Month forwar
Slide 26: High yield municipal yields remain compelling at 6.21%
High yield municipal yields remain compelling at 6.21%, 83 basis points above the 5-year average Bloomberg High Yield Municipal Index YTW 6.5 6.21% 6.0 5.5 5.0 4.5 4.0 3.5 3.0 2.5 2.0 BBG HY Muni Index Yield to Worst Avg Yield +1 Std Dev -1 Std Dev Source: Barclays and Bloomberg, as of 9/30/2026. Th
Slide 27: Muni/Treasury ratios have increased across the curve
Muni/Treasury ratios have increased across the curve Muni/Treasury Ratios Muni/Treasury Ratios 12/31/25 and 9/30/26 12/31/2025 9/30/2026 95% 95% 92% 88% 86% 85% 85% 82% 78% 75% 75% 73% 66% 65% 65% 65% 55% 55% 5-Year 10-Year 20-Year 30-Year 5-Year 10-Year 20-Year 30-Year Source: Bloomberg as of 9/30/
Slide 28: Municipal Credit Overview
Municipal Credit Overview
Slide 29: Credit Fundamentals: Municipal Credit Quality Remains Constructive
Credit Fundamentals: Municipal Credit Quality Remains Constructive, Despite Growing Regional and Sector Divergence • State and Local Governments outlook remains stable. States & Water & Higher Charter The median rainy day fund balance has decreased slightly from its Locals Sewer Education Schools pr
Slide 30: Municipal credit quality remains positive, but the upgrade/downgrade ratio has weakened
Municipal credit quality remains positive, but the upgrade/downgrade ratio has weakened. Q2 2026’s Upgrades/Downgrade ratio has weakened but remains well above 2020 lows Source: BofA Global Research, Moody’s Ratings, S&P Ratings, Bloomberg, J.P. Morgan as of 6/30/26 Municipal Bond Market Monitor | S
Slide 31: State Credit Fundamentals: Strong Fund Balances and Better-Than-Expected Revenues
State Credit Fundamentals: Strong Fund Balances and Better-Than-Expected Revenues Position States to Navigate Federal Funding Challenges State Rainy Day Fund Balances & Median Balance as % of Expenditures General Fund Revenue Collections Compared To Original Revenue Estimates (By Fiscal Year) 18% $2
Slide 32: Municipal Defaults Remain Well Below Historical Averages
Municipal Defaults Remain Well Below Historical Averages, Despite a Modest Year-to-Date Increase Annual First-Time Payment Default Count Q3 2026 Default Count Increased YoY 2026 YTD: 38 issuers (through September) 160 20 120 80 10 16 40 6 0 0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 20
Slide 33: Disclosures
Disclosures
Slide 34: Risk Considerations
RISK CONSIDERATIONS 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. I
Slide 35: Additional Information
ADDITIONAL INFORMATION Credit ratings that may be referenced are based on Moody's, S&P or Fitch, as applicable. Credit ratings This material has been prepared on the basis of publicly available information, internally developed data are based largely on the rating agency's investment analysis at the
Slide 36: Important Information and Disclosure
ADDITIONAL INFORMATION Important Information and Disclosure TERMS INDEX DEFINITIONS Municipal-to-Treasury Yield Ratios are relative value indicators that measure the richness or Bloomberg Municipal Bond Index is an unmanaged index of municipal bonds traded in the U.S. cheapness of Municipal bond yie
Slide 37: Additional Information
ADDITIONAL INFORMATION The Firm has not authorised financial intermediaries to use and to distribute this material, unless such use EMEA and distribution is made in accordance with applicable law and regulation. Additionally, financial This material is for Professional Clients/Accredited Investors o
Slide 38: Additional Information
ADDITIONAL INFORMATION U.S. NOT FDIC INSURED | OFFER NO BANK GUARANTEE | MAY LOSE VALUE | NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY | NOT A DEPOSIT Latin America (Brazil, Chile Colombia, Mexico, Peru, and Uruguay) This material is for use with an institutional investor or a qualified investor onl