Eaton Vance launched the Eaton Vance Short Duration Income ETF (EVSD ) today on the Nasdaq. The fund is a conversion of an existing short-duration bond mutual fund strategy and offers bond exposure while limiting duration risk.
EVSD seeks to generate above-average returns over a three-to-five-year market cycle. It does so by investing mostly in U.S. government securities, corporate bonds, and mortgages as well as asset-backed securities. It also invests up to 25% in below-investment-grade, high-yield bonds.
The fund is actively managed and provides exposure to short-duration bonds between one and five years. EVSD’s benchmark is the Bloomberg 1-5 Year US Credit Index and the fund seeks to have an average duration of three years or less.
The strategy seeks value within bonds while offering less exposure to interest rate changes. The fund managers take into consideration real interest rates, the yield curve, and credit spreads when investing.
The Broad Markets Fixed Income management team utilizes top-down macro and thematic analysis. The fund also employs bottom-up sector analysis when selecting securities. The strategy combines the analysis from specialized sector research teams to construct its multi-sector approach.
By combining these insights, the fund leverages the expertise of the fixed income teams to seek compelling securities on the front end of the yield curve. EVSD also layers in risk management when constructing its portfolio.
With this most recent fund conversion, Morgan Stanley Investment Management now offers eight actively managed fixed income ETFs. EVSD is the third fixed income mutual fund conversion this year for MSIM.
The firm’s ETF platform currently offers 15 funds in total according to the press release. These include seven Eaton Vance-branded fixed income ETFs, six Calvert-branded funds, a Parametric alternative income ETF, and a Parametric hedged equity fund. The platform, launched at the beginning of last year, currently holds over $2 billion in assets.
Capturing the strategy within the ETF wrapper offers tax efficiency for investors.
EVSD carries an expense ratio of 0.24%.
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