The new year may have only just begun, but the bond market is already beginning to face some potential headwinds. CNBC recently reported that about $3 trillion of U.S. debt is slated to hit maturity this year. Notably, a sizable portion of this debt is from short-term issuances from the Treasury Department over the last couple of years.
As CNBC noted, investors should expect the Treasury to continue to play cat and mouse by extending the duration of the debt. However, these Treasury sales highlight a key risk for the fixed income market this year. The concern in question: How will the market react if the Treasury is unable to find willing buyers?
“With traders now pricing in a shallower path of rate cuts, and investors left to deal with an influx of issuance, it could be another challenging year for fixed income,” CNBC added.
All this being said, there’s still plenty of reason to stay engaged with the bond market. Though a shallower path it may be, the Fed’s rate cuts can still create great opportunities for fixed income.
One of the more efficient means to ride out the fixed income market is through actively managed ETFs. By tapping into an active ETF with experienced fund managers, investors can lock in yields and be in a better position to navigate volatility.
EVTR Offers an Actively Managed Solution
For instance, take a closer look at the Eaton Vance Total Return Bond ETF (EVTR ). This fund gives investors access to an actively managed core, plus a selection of bonds.
Even though the crux of EVTR’s portfolio rests in investment grade bonds, the fund holds a smaller tactical allocation to high yield. This lets the fund blend the stability of investment grade bonds with the income potential of high yield offerings.
Before the new year even began, investors were increasingly opting for EVTR’s dynamic fixed income strategy. Towards the end of 2024, the fund surpassed the $1 billion threshold in terms of assets under management.
See More: Eaton Vance’s Core Plus Bond ETF Passes $1 Billion in AUM
As for why investors are trusting Eaton Vance’s fund, the results speak for themselves. As of December 30, 2024, EVTR has a 30-day SEC yield of 4.94%.
For more news, information, and analysis, visit The ETF Yield Channel.
