Eaton Vance Short Duration Diversified Income Fund

EVG

Market cap $149M

Eaton Vance Short Duration Diversified Income Fund offers diversified, short-duration fixed-income exposure, reducing interest rate sensitivity and appealing in higher-rate environments. EVG's discount to NAV has narrowed significantly over the years, now near parity, making valuation less attractive compared to historical averages and potentially limiting opportunistic upside. The fund's managed distribution policy has been reduced this year to what appears to be 8% of NAV, improving coverage, but with lower rates, coverage could compress once again.

We rate EVG a 'Sell' due to its leverage, tight credit spreads, and minimal discount to NAV, which skew risk/reward to the downside. EVG's portfolio is overweight MBS and includes CLOs, resulting in high drawdowns during market stress compared to unleveraged ETF peers. The fund's discount to NAV has disappeared, removing a key margin of safety.

BOSTON--(BUSINESS WIRE)--The following Eaton Vance closed-end funds (the “Funds”) announced distributions today as detailed below. Declaration – 2/3/2025 Ex-Date – 2/13/2025 Record – 2/13/2025 Payable – 2/24/2025 Municipal Bond Funds:   Fund Ticker Distribution Change From Prior Distribution Closing Market Price – 1/31/25 Distribution Rate at Market Price Eaton Vance California Municipal Income Trust CEV $0.0500 - $10.14 5.92% Eaton Vance Municipal Income Trust EVN $0.0513 - $10.31 5.97% Taxabl.

BOSTON--(BUSINESS WIRE)--The following Eaton Vance closed-end funds (the “Funds”) announced distributions today as detailed below. Declaration – 1/2/2025 Ex-Date – 1/13/2025 Record – 1/13/2025 Payable – 1/22/2025 Municipal Bond Funds: Fund Ticker Distribution Change From Prior Distribution Closing Market Price – 12/31/24 Distribution Rate at Market Price Eaton Vance California Municipal Income Trust CEV $0.0500 - $10.04 5.98% Eaton Vance Municipal Income Trust EVN $0.0513 - $10.11 6.09% Taxable.

The Eaton Vance Short Duration Diversified Income Fund is downgraded to 'Hold' after a 13% total return in 2024 due to stretched valuations. The fund's portfolio remains stable with 27.6% MBS, 25% leveraged loans, and 15.7% CLOs, balancing AAA-rated and below-investment-grade assets. Credit spreads are historically tight, posing a risk to the fund's NAV and price in a potential risk-off scenario.

BOSTON--(BUSINESS WIRE)--The following Eaton Vance closed-end funds (the “Funds”) announced distributions today as detailed below. Declaration – 12/2/2024    Ex-Date – 12/12/2024    Record – 12/12/2024    Payable – 12/19/2024 Municipal Bond Funds: Fund Ticker Distribution Change From Prior Distribution Closing Market Price – 11/29/24 Distribution Rate at Market Price Eaton Vance California Municipal Income Trust CEV $0.0500 - $10.65 5.63% Eaton Vance Municipal Income Trust EVN $0.0513 - $10.79.

BOSTON--(BUSINESS WIRE)--The following Eaton Vance closed-end funds (the “Funds”) announced distributions today as detailed below. Declaration – 11/1/2024 Ex-Date – 11/11/2024 Record – 11/11/2024 Payable – 11/18/2024   Municipal Bond Funds: Fund Ticker   Distribution   Change From Prior Distribution   Closing Market Price – 10/31/24   Distribution Rate at Market Price Eaton Vance California Municipal Income Trust CEV   $0.0500   -   $10.55   5.69% Eaton Vance Municipal Income Trust EVN   $0.051.

BOSTON--(BUSINESS WIRE)--The following Eaton Vance closed-end funds (the “Funds”) announced distributions today as detailed below. Declaration – 10/1/2024 Ex-Date – 10/11/2024 Record – 10/11/2024 Payable – 10/18/2024   Municipal Bond Funds:           Fund Ticker Distribution Change From Prior Distribution Closing Market Price – 9/30/24 Distribution Rate at Market Price Eaton Vance California Municipal Income Trust CEV $0.0500 - $10.87 5.52% Eaton Vance Municipal Income Trust EVN $0.0513 - $10.9.

The Eaton Vance Short Duration Diversified Income Fund offers an 8.51% yield, higher than major domestic and international bond indices, which might appeal to income investors. The fund's yield is average compared to peers, suggesting market confidence in its distribution sustainability but requiring a trade-off in potential income. The fund's portfolio, heavily invested in floating-rate collateralized loan obligations, faces income decline risks due to expected Federal Reserve interest rate cuts.

BOSTON--(BUSINESS WIRE)--The following Eaton Vance closed-end funds (the “Funds”) announced distributions today as detailed below. Declaration – 9/3/2024 Ex-Date – 9/13/2024 Record – 9/13/2024 Payable – 9/20/2024   Municipal Bond Funds:           Fund Ticker Distribution Change From Prior Distribution Closing Market Price – 8/30/24 Distribution Rate at Market Price Eaton Vance California Municipal Income Trust CEV $0.0500 - $10.90 5.50% Eaton Vance Municipal Income Trust EVN $0.0513 - $10.78 5.