Eaton Vance Laddered Investing

Transcription

1 Eaton Vance Laddered Investing Core exposure to the municipal and corporate bond markets Partner with Eaton Vance for: Customizable, professionally managed portfolios for municipal and corporate bonds. Security selection based on in-depth credit research, institutional execution and experienced oversight. A cost-effective transition analysis for incoming portfolios.

2 Eaton Vance Laddered s Time. Access. Execution. Oversight. Key potential benefits to Eaton Vance s laddered bond portfolios include: Time saved. Due to heightened credit concerns, volatile interest rates and limited access to bonds, self-managed portfolios are consuming more time than ever. Ladders can help your income plan become more efficient. Access to municipal and corporate bonds. Market access is important to investors. We have access to a global network of over 100 dealers. Institutional execution. Obtaining the best price is difficult for individual investors. 1 We use our institutional power to buy and sell bonds at favorable prices. Oversight with professional credit research and management. Credit exposure in portfolios may be a major source of risk. A dedicated team of experienced credit analysts selects and monitors investments. 1 A study released by the U.S. Government Accountability Office (USGAO) in January 2012 found that, relative to institutional investors, individual investors typically pay higher prices when buying municipal bonds and receive lower prices when selling these securities. One of the main reasons is because spreads are highly dependent on the size of the trade; individual investors and financial advisors who trade smaller blocks of municipal bonds are paying more to do so.

3 Eaton Vance Managed Ladders Build custom bond ladders with confidence and ease. Highly customized separately managed accounts tailored to your needs a benefit unavailable to ETFs or index funds. Rules-based to provide you with transparent market exposure. Professional oversight and institutional trade execution. 1. TRANSITION SECURITIES or fund with cash Identify unmanaged munis or taxable bonds Personalized service, including comprehensive transition support (see back) 2. DESIGN THE EXPOSURE TABS Municipal Bond Ladders Maturity ranges within 1-20 years Corporate Bond Ladders Maturity ranges within 1-10 years 3. CUSTOMIZE THE PORTFOLIO TABS Municipal Bond Ladders Credit Quality Options 2 AA-, A- or BBB (National BBB available at a max. of 30%) State Options 3 National State-specific: CA, NY, MA, MI, MN, NJ, OH, PA, TX State preference (Generally target 50% in-state): CA, NY, AZ, CO, CT, GA, MA, MI, MN, MO, MD, NC, NJ, OH, OR, PA, TX, VA, UT Best efforts (Generally target 20% in-state): FL, HI, IN, KY, LA, SC, TN Corporate Bond Ladders Credit Quality Options 2 A- or BBB- (BBB available at a max. of 60%) ONGOING MANAGEMENT Access and buying power: Institutional buying power and access to a global network of over 100 bond dealers Rigorous oversight: A dedicated team of approximately 26 credit analysts with over 300 years of experience selects and monitors investments Also available: Laddered municipal bond funds TABS 1-to-10 Year Laddered Municipal Bond Fund TABS 5-to-15 Year Laddered Municipal Bond Fund TABS 10-to-20 Year Laddered Municipal Bond Fund A Shares EALBX/27826M684 A Shares EALTX/27826M759 A Shares EATTX/27826M676 C Shares ECLBX/27826M650 C Shares ECLTX/27826M742 C Shares ECTTX/27826M668 I Shares EILBX/27826M635 I Shares EILTX/27826M734 I Shares EITTX/27826M643 Product availability and customization options may vary by firm and platform. 2 Ratings are based on Moody s, S&P or Fitch, as applicable. Credit ratings are based largely on the ratings agency s investment analysis at the time of rating and the rating assigned to any particular security is not necessarily a reflection of the issuer s current financial condition. The rating assigned to a security by a ratings agency 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. If securities are rated differently by the ratings agencies, the higher rating is applied. Ratings of BBB or higher by Standard and Poor s or Fitch (Baa or higher by Moody s) are considered to be investment-grade quality. 3 State-specific, state preference and best efforts available in A- min. only.

4 Looking beyond traditional sources of yield General Characteristics Initial Investment Market Value: $1,000,000 Ladder Range: 1-10 Years Credit Quality 1 : BBB- or Higher Interest Rate Shock Rate Increase: 2.00% Time Period: 5 Years Amount Per Year: 0.40% Summary Statistics Starting Average Duration to Maturity: 4.90 The information contained in this report Starting has been prepared Average at the Maturity: specific request and for the exclusive use of the above-named individual Years This information is private and confidential. See page 1 for important additional information and disclosure. Starting Yield to Maturity: 2.96% 1. Ratings are based on Moody, S&P or Fitch, as applicable. Credit ratings are based largely on the ratings agency investment analysis at the time of rating, and the rating assigned to any particular security is not necessarily a reflection of the issuer current financial condition. The rating assigned to a security by a ratings agency does not necessarily reflect its assessment of the volatility of a security market value or of the liquidity of an investment in the security. If securities are rated differently by the ratings agencies, the higher rating is applied. Ratings of BBB or higher by Standard and Poor s or Fitch (Baa or higher by Moody s) are considered to be investment-grade quality. Yields as of June 29, Customized scenarios based upon client specified metrics. All customized scenarios assume rise in rates takes place evenly across specified time horizon. Certain assumptions have been made for modeling purposes and may not be realized. No representation or warranty is made as to the reasonableness of the assumptions made or that all assumptions used in achieving the returns have been stated or fully considered. Model performance results have many inherent limitations and no representation Is made that any account will or is likely to profit similar to those shown. This is only an example representation and is not an indication of how the portfolio would have performed in the past or will perform in the future. A full description of laddered scenario calculator is on the Eaton Vance 3 following page. This information is supplemental to the GIPS presentation for the composite. Please refer to the back of this presentation for additional Important information. Past performance does not predict or guarantee future results. Looking beyond traditional sources of yield 1-10 Yr, BBB- Minimum Laddered Market Value (not including accrued interest) $593,120 $594,055 Yield To Maturity 2.4% 2.3% Rolling Yield to Maturity 2 3.1% Average Duration Average Credit Quality3 BBB+ / Baa1 A- / A3 Average Years to Maturity Average Coupon 5.1% 4.5% Average Dollar Price $ $ Coupon Income (next 12 Months) $26,800 $24,334 Maturities (next 12 Months) $20,821 $11, The information contained Statistics include this report cash has position. been prepared Market Value at the does specific not include request accrued and for the interest. exclusive Calculated use of the as of above-named 04/28/15 by individual. Eaton Vance. The Strategy s overall average portfolio Number of Positions This credit information quality is not is private assigned and by confidential. an independent See page credit 1 for agency. important Rather, additional is calculated information by the and investment disclosure. adviser by determining the average credit quality of the Strategy s investments based on their market value, excluding any derivative instruments. If individual securities are rated differently by the independent credit agencies described in the prospectus, the higher rating is used to calculate the average portfolio credit quality. Unrated securities are included based on internally assigned ratings. Average credit quality may change over time. 2. Rolling Yield to Maturity: Academic research suggest that for portfolios with stable durations (like ladders) with just parallel shifts in the yield curve, that returns over time converge to a rolling yield rather than the calculated yield to maturity. In the case of ladders, the rolling yield coincides with the yield of the longest rung. Essentially, with a positively sloped yield curve, as bonds roll down the maturity curve they experience a positive price gain and a total return above their yield to maturity. 3. Ratings are based on Moody, S&P or Fitch, as applicable. Credit ratings are based largely on the ratings agency investment analysis at the time of rating, and the rating assigned to any particular security is not necessarily a reflection of the issuer current financial condition. The rating assigned to a security by a ratings agency does not necessarily reflect its assessment of the volatility of a security market value or of the liquidity of an investment in the security. If securities are rated differently by the ratings agencies, the higher rating is applied. Ratings of BBB or higher by Standard and Poor s or Fitch (Baa or higher by Moody s) are considered to be investment-grade quality. This information is for illustrative purposes only, is subject to change at any time and should not be considered investment advice or a recommendation to buy or sell any particular security. Information is based on a representative client account and is subject to change. The representative client portfolio was chosen because it is unrestricted and fairly represents the style of the manager(s). Actual result will vary for each client. This information is supplemental to the GIPS presentation for the composite. Please refer to the back of this presentation for additional Important information. Past performance does not predict or guarantee future results. Eaton Vance 5 Seeking tax-efficient income and equity 12% 9% 9% 9% 9% RULES BASED TAX FREE INCOME CUSTOMIZED TO YOUR NEEDS 6% 4% 2% 1% 0% Cash Years to Maturity $8,000 $7,588 $7,588 $7,000 $6,000 Total Next 12 $5,000 The information contained in this report has been prepared at the specific request and for the exclusive use of the above-named $3,950 individual. This information is private and confidential. See $3,859 $3,950 Months page 2 for important additional information and disclosure. $3,859 $4,000 Eaton Vance $2,819 $2,875 $2,819 $2,875 $42,181 $3,000 $2,000 $1,000 $0 2/15 3/15 4/15 5/15 6/15 7/15 8/15 9/15 10/15 11/15 12/15 1/16 This information is for illustrative purposes only, is subject to change at any time and should not be considered investment advice or a recommendation to buy or sell any particular security. The information is based upon data provided by the investor or his/her advisor/consultant and is supplemental to the GIPS presentation for the Composites listed at the end of this report. Eaton Vance 9 Seeking tax-efficient income and equity 20% 1 EV TABS would TRANSITION 16% EV TABS would HOLD 14% RULES BASED TAX FREE 12% INCOME CUSTOMIZED TO YOUR NEEDS 6% 4% 2% 0% Cash Years to Maturity 12% 9% 9% 9% 9% 9% The information contained 6% in this report has been prepared at the specific request and for the exclusive use of the above-named individual. This information is private and confidential. See page 2 for important additional information and disclosure. 4% Eaton Vance 2% 0% Cash Years to Maturity Ladder s structure accounts for minimum 1% cash. This information is for illustrative purposes only, is subject to change at any time and should not be considered investment advice or a recommendation to buy or sell any particular security. The information is based upon data provided by the investor or his/her advisor/consultant and is Eaton Vance 7 supplemental to the GIPS presentation for the Composites listed at the end of this report. with confidence and ease Eaton Vance can provide you with tools and resources to help transition your portfolio to a laddered structure. Laddered Interest Rate Scenario Tools Customize sample laddered municipal and corporate bond portfolios based on your objectives and risk tolerance. Visit eatonvance.com/ladders for more information. Sample Reports Customize a sample portfolio and view the holdings, structure and credit breakdown. Eaton Vance CORPORATE LADDERS Eaton Vance Corporate Ladders RULES BASED CUSTOMIZED TO YOUR NEEDS Sample 1-10 year, BBB- min, 2% over 5 years Prepared for: Sample Date: Sample INCOME Sample Sample National, 5-15 Year, A- Minimum Rating Prepared For: Sample Date: 5/21/2015 TAXES Eaton Vance LADDERED MUNICIPALS Sample Tax-Advantaged National, 5-15 Year, A- Minimum Bond Rating Strategies LADDERED MUNICIPALS Maturity Breakdown Coupon Cashflow - Next 12 Months Analysis Reports View current and sample transitioned portfolio statistics. See which bonds we d keep, which we d sell and why. Eaton Vance CORPORATE LADDERS Eaton Vance Corporate Ladders INCOME Sample Eaton Vance Summary 1 RULES BASED CUSTOMIZED TO YOUR NEEDS Current Analysis 1-10 Yr, BBB- Minimum Rating Prepared for: Sample Date: Sample Analysis Eaton Vance LADDERED MUNICIPALS National, 5-15 Year, A Minimum Rating Tax-Advantaged Bond Strategies LADDERED MUNICIPALS Current Analysis National, 5-15 Year, A Minimum Rating Prepared For: Sample Date: 5/21/2015 ed TAXES Access to Managers Conduct conference calls to answer questions, review performance and discuss current opportunities with our team of portfolio managers. James Evans, CFA Director of TABS Manager Tom Luster, CFA Director of Quantitative Strategies Diversified Fixed Income

5 Request a personalized transition analysis Eaton Vance Managed Ladders What we need from you: Par values and CUSIPs of existing bonds Preferred credit quality and maturity ranges Your customized report includes: A cost-effective transition analysis for incoming portfolios Detailed information on which bonds we d keep, which we d sell and why Eaton Vance LADDERED MUNICIPALS National, 5-15 Year, A Minimum Rating Eaton Vance TABS - Laddered Analysis as of 1/30/2015 Action Legend Reason For EV TABS Action Legend Hold All Sell All Sell Partial Client: Sample Market Value: $ 1,002,069 Yield (to worst): 0.95% Duration (to worst): 3.43 Yrs State: Credit: Maturity: Type: State does not fit specified parameters Credit Ratings do not fit specified parameters Maturity does not fit specified parameters Bond Type is not approved (i.e. taxable) Restruct: Exceeds exposure to issuer or maturity CUSIP Par ST Issuer CPN Eff Mat Prere Ratings YTW Action Reason 64986AKC 60 NY New York St Envrnmntl Facs Cor /15/2019 N Aaa / AAA / AAA 0.05% Sell All Maturity 64983MZ8 40 NY New York St Dorm Auth Revenues /1/2015 N - / AA / AA 0.02% Sell All Maturity 64971QF5 30 NY New York City Ny alf /1/2016 N Aa1 / AAA / AAA 0.06% Sell All Maturity Eaton Vance CORPORATE LADDERS K3 75 NY New York St Dorm Auth Revenues /1/2015 N Aa3 / AA / AA- 0.19% Sell All Maturity 73358TRM 30 NY Port Auth Of New York & New Je /15/2022 N Aa3 / AA- / AA- 0.21% Hold All HZG 80 NY New York Ny /1/2016 N Aa2 / AA / AA 0.29% Sell All Maturity 64988VCS 25 NY New York St Muni Bond Bank Agy /15/2016 N A2 / AA / % Sell All Maturity 64971QE8 35 NY New York City Ny alf /1/2016 Y Pre-Refunded 0.41% Sell All Maturity 64983QK5 100 NY New York St Dorm Auth Revenues /1/2017 N Aa1 Current / AA / % Sell All Maturity 29509PCL 30 NY Erie Cnty Ny Indl Dev Agy Sch /1/2018 N Aa2 / AA / % Sell All Maturity E5 20 NY New York St Dorm Auth Revenues /1/2017 N AAAa3 / AA / AA-A BBB 0.61% Cash Sell All Maturity SK 60 NY Sachem Ny Centrl Sch Dist Of H /15/2019 N - / 3% AA / - 1% 4% 1.17% Sell All Maturity JW 25 NY New York St Dorm Auth Revenues /1/2019 N Aa3 / AA- / AA 1.32% Sell All Maturity JW 60 NY Rochester Ny /15/2021 N Aa3 / A+ / A+ 1.56% Sell All Credit 59259YLU 20 NY Met Transprtn Auth Ny Revenue /15/2021 N A2 / AA- / A 1.64% Hold All jva 30 NY New York Ny /1/2023 N Aa2 / AA / AA 1.6 Hold All - Sample Eaton Vance Laddered AA A BBB Cash 2% Analysis Ratings 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 36% of rating and the rating assigned to any particular security is not necessarily a reflection of the issuer's current financial condition. The rating assigned to a security by a rating agency 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. If securities are rated differently by the rating agencies, the higher rating is applied. 56% This information is for illustrative purposes only, is subject to change at any time and should not be considered investment advice or a recommendation to buy or sell any particular security. The information is based upon data provided by the investor or his/her advisor/consultant and is supplemental to the GIPS presentation for the Composites listed at the end of this report. Eaton Vance 9 51% 37% Sector Cash 1.0% Media 3.5% Automotive 3.5% Real Estate 3.5% Banking 3.5% Retail 3.5% Basic Industry 3.5% Services 3.5% Capital Goods 3.5% Technology & Electronics 3.5% Consumer Goods 3.5% Telecommunications 3.5% Energy 3.5% Transportation 3.5% Financial Services 3.5% Utility 3.5% Healthcare 3.5% Total 100% Insurance 3.5% Leisure 3.5% Sector Cash 1.0% Media 3.5% Automotive 3.5% Real Estate 3.5% Banking 3.5% Retail 3.5% Basic Industry 3.5% Services 3.5% Capital Goods 3.5% Technology & Electronics 3.5% Consumer Goods 3.5% Telecommunications 3.5% Energy 3.5% Transportation 3.5% Financial Services 3.5% Utility 3.5% Healthcare 3.5% Total 100% Insurance 3.5% Leisure 3.5% Ratings are based on Moody, S&P or Fitch, as applicable. Credit ratings are based largely on the ratings agency investment analysis at the time of rating, and the rating assigned to any particular security is not necessarily a reflection of the issuer current financial condition. The rating assigned to a security by a ratings agency does not necessarily reflect its assessment of the volatility of a security market value or of the liquidity of an investment in the security. If securities are rated differently by the ratings agencies, the higher rating is applied. Ratings of BBB or higher by Standard and Poor s or Fitch (Baa or higher by Moody s) are considered to be investment-grade quality. This information is for illustrative purposes only, is subject to change at any time and should not be considered investment advice or a recommendation to buy or sell any particular security. Information is based on a representative client account and is subject to change. The representative client portfolio was chosen because it is unrestricted and fairly represents the style of the manager(s). Actual result will vary for each client. This information is supplemental to the GIPS presentation for the composite. Please refer to the back of this presentation for additional Important information. Past performance does not predict or guarantee future results. Eaton Vance 7 For illustrative purposes only.

6 Make the transition Eaton Vance has the experience, tools and resources to help make the transition as smooth as possible Customizable, professionally managed portfolios for municipal and corporate bonds. Security selection based on in-depth credit research, institutional execution and experienced oversight. A cost-effective transition analysis for incoming portfolios. Take the next step For more information on our laddered strategies, speak with your financial advisor or visit eatonvance.com. About Eaton Vance Eaton Vance is a leading global asset manager whose history dates to With offices in North America, Europe, Asia and Australia, Eaton Vance and its affiliates offer individuals and institutions a broad array of investment strategies and wealth management solutions. The Company s long record of providing exemplary service, timely innovation and attractive returns through a variety of market conditions has made Eaton Vance the investment manager of choice for many of today s most discerning investors. For more information about Eaton Vance, visit eatonvance.com About Risk Municipal securities are subject to the risk that legislative changes and local and business developments may adversely affect the yield or value of the strategy s investments in such securities. Municipal securities are subject to credit risk, which is the risk that the issuer could default on interest or principal payments. Municipal securities are subject to interest-rate risk. Rising interest rates could reduce the value of the bonds in the portfolio, thus adversely affecting the value of the overall investment. Corporate laddered investments in corporate debt obligations are subject to the risk of nonpayment of principal and interest. Changes in economic conditions or other circumstances may reduce the capacity of the party obligated to make principal and interest payments on such instruments and may lead to defaults. Such nonpayments and defaults may reduce income distributions. The value of a debt obligation also may decline because of concerns about the issuer s ability to make principal and interest payments. In addition, the credit ratings of income securities may be lowered if the financial condition of the party obligated to make payments with respect to such instruments change. Mutual funds are distributed by Eaton Vance Distributors, Inc. Advisory Services are offered through Eaton Vance Management, an SECregistered investment advisor. Not all strategies available at all firms. Before investing, investors should consider carefully the investment objectives, risks, charges and expenses of a mutual fund. This and other important information is contained in the prospectus and summary prospectus, which can be obtained from a financial advisor. Prospective investors should read the prospectus carefully before investing. Past performance is no guarantee of future results. Our investment affiliates Not FDIC Insured Not Bank Guaranteed May Lose Value For more information, visit eatonvance.com/ladders Eaton Vance Distributors, Inc. Member FINRA/SIPC Two International Place, Boston, MA eatonvance.com