When it comes to building a fixed income portfolio as of late, much of the attention from investors has been focused on short duration bonds, and for good reason.
That being said, there’s still a good case to be made for intermediate duration bond exposure. As for why, it’s best to take a broader look at some of the macro headwinds the markets may face.
Plenty of uncertainty lies ahead for both the market and the economy, including questions about economic growth and the presidential election. These bumps in the road could lead to monetary policy from the Federal Reserve that is slower than analysts are currently expecting.
This can offer a great opportunity for investors to tap into an intermediate duration bond portfolio. Intermediate bonds can offer a middle ground between the reinvestment risk of short term bonds and the interest rate risk associated with long term bonds.
Eaton Vance's Strategy for Bonds Now Available at a Discount
To build out one’s intermediate duration bond portfolio, consider the Eaton Vance Intermediate Municipal Income ETF (EVIM ). EVIM provides investors with a diversified selection of core muni bonds.
Eaton Vance is currently offering a waiver on EVIM’s expense ratio. For now, investors can lock in an actively managed core intermediate bond fund for only 10 basis points.
This can mean a tremendous opportunity for investors to harness the expertise of Eaton Vance’s fixed income management. As of October 15th, 2024, EVIM is edging out the returns of the ICE BofA 2-17 Year US Municipal Securities Index on a year-to-date basis.
Looking under EVIM’s hood shows that the fund holds bonds across a wide variety of muni sectors. As of September 30th, 2024, the fund has an average portfolio duration of 5.92 years. This gives investors a good middle ground to tap into the yield curve.
Investors have been jumping at the opportunity to tap into Eaton Vance’s intermediate muni strategy. FactSet data shows that EVIM has seen over $18 million in fund flows over the last month.
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