Investors still have a little over a month before the new year kicks in, creating a great opportunity to curate bond investments.
Many experts and analysts have mixed opinions about what the U.S. economy will look like in 2025. Some see the potential for strong growth, while others worry about possible inflation risks.
That being said, things at least look good in the near-term for U.S. investment-grade corporate bonds. Data from the St. Louis Fed shows that the spread on the ICE BofA U.S. Corporate Index remains attractively low.
With near-term opportunities bubbling and the long-term outlook remaining unclear, investors may want to focus on short-duration bonds. Short-duration bonds can capitalize on attractive yield opportunities while mitigating much of the long-term interest rate risk.
EVSD Can Do the Trick
One fund that offers a compelling short-duration bond strategy is the Eaton Vance Short Duration Income ETF (EVSD ). At the cost of 24 basis points, EVSD offers a well-diversified mix of short-duration fixed income assets. The fund’s average portfolio duration aims to sit at three years or less.
EVSD’s portfolio contains a variety of different fixed income securities, including asset-backed securities and U.S. government bonds. However, over 40% of the fund’s portfolio is filled with investment-grade credit, offering a good opportunity to capitalize on low corporate bond spreads.
The vast majority of EVSD’s bonds are of investment-grade quality. As such, the fund’s components can offer a lower risk of volatility or default, which can be highly beneficial heading into the new year.
For those who remain wary of what 2025 may bring, EVSD’s active portfolio management team can be a boon. Leveraging Eaton Vance’s extensive experience in fixed income, EVSD can trawl through a variety of sectors to find more attractive and timely investment options.
With an overall Morningstar rating of five stars, EVSD is generating strong yield for its investors. As of November 22, 2024, the fund has a 30-day SEC yield of 4.90%.
For more news, information, and analysis, visit The ETF Yield Channel.
