Investors increasingly seek refuge in bonds at the end of the first quarter as economic uncertainty grows. With recession and inflation risks on the rise, bonds hold strong appeal for their low correlations to equities. Eaton Vance, a pioneer within bonds since 1989 and part of Morgan Stanley Investment Management, offers a comprehensive, actively managed bond ETF suite worth consideration this year.
Short and Ultra-Short Bond ETFs
The Eaton Vance Ultra-Short Income ETF (EVSB ) seeks capital preservation while maximizing income potential. EVSB provides exposure to investment grade, short-term fixed, variable, and floating-rate bonds that generate income. The Broad Markets Fixed Income team seeks to keep the fund’s duration to one year or less and invests across sectors. EVSB has an expense ratio of 0.17%.
The Eaton Vance Short Duration Income ETF (EVSD ) seeks to offer higher returns across a three to five year business cycle. The fund invests across sectors in corporate bonds, U.S. government bonds, and mortgage and asset-backed securities. The Broad Markets Fixed Income team seeks to keep the fund’s duration to three years or less and employs a top-down and bottom-up investment strategy. EVSD carries an expense ratio of 0.24%.
Capture the Tax Advantages of Municipal Bonds
The Eaton Vance Short Duration Municipal Income ETF (EVSM ) provides current income with the added benefit of tax exemptions at the federal level. EVSM invests across the municipal bond sectors, credit tiers, and states. The strategy seeks to offer a duration of less than three years with an expense ratio of 0.19%.
The Eaton Vance Intermediate Municipal Income ETF (EVIM ) seeks current income that is exempt from regular federal income tax. Similar to EVSM, the fund invests across municipal bond sectors, credit tiers, and states. However, the fund offers exposure to longer duration bonds than EVSM. The current duration for the fund is 6.12 years as of February 28, 2025 and the fund has an expense ratio of 0.10%.
The recently launched Eaton Vance High Income Municipal ETF (EVYM) seeks high current income exempt from federal income tax. The strategy invests in primarily in high yield municipal bonds as well as investment-grade muni bonds. EVYM generally invests in municipal bonds with a maturity of at least 10 years, with a focus on creditworthiness. The fund carries an expense ratio of 0.39%.
Broad, High Yield, and Floating Rate Bond ETFs
The Eaton Vance Total Return Bond ETF (EVTR ) seeks to provide investors with core plus bond exposure. The strategy invests in a diversified blend of investment-grade bonds as well as higher-yield bonds. The Broad Markets Fixed Income team uses a top-down and bottom-up approach to select securities across sectors. EVTR has an expense ratio of 0.32%.
The Eaton Vance Floating-Rate ETF (EVLN ) seeks high current income. EVLN offers diversified exposure to floating-rate bonds that offer low interest rate risk. The fund utilizes bottom-up credit research alongside risk management when investing. It also invests in high-yield and securitized bonds with a management fee of 0.60%.
The Eaton Vance High Yield ETF (EVHY ) seeks high current income and capital growth. EVHY offers exposure to high yield with a focus on high quality, high yield bonds. These bonds rate mostly between BB and B. The investment strategy EVHY utilizes is one employed by Eaton Vance for over 20 years. It relies upon risk management as well as integrated research when selecting securities. EVHY carries an expense ratio of 0.48%.
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