The ETF landscape continues to grow as investors discover the many merits of the wrapper. From tax advantages to transparency, ETFs present an appealing option for structuring all kinds of strategies. For Eaton Vance and Morgan Stanley Investment Management (MSIM), their senior loan ETF may be benefiting, adding approximately $500 million in just one day last month.
See more: Morgan Stanley Converts 2 Mutual Funds Into Active ETFs
The senior loan ETF, the Eaton Vance Floating-Rate ETF (EVLN ), picked up $499.46 million on March 27. That has contributed to more than $500 million in net flows over the last month.
“While EVLN is a relatively new ETF, the Eaton Vance team behind this senior loan ETF is highly experienced,” said VettaFi’s Head of Research Todd Rosenbluth. “Demand for active management has been strong in 2024 for fixed income ETFs.”
So, how does the strategy invest? EVLN charges a 60 basis point fee. It launched in February, but has matched its FactSet Segment Average over the last three months. The strategy actively invests by looking for high current income in subinvestment-grade floating-rate loans and corporate debt.
It invests with a cap of 20% in floating-rate credit instruments. It diversifies across industries and borrowers while using fundamental analysis to assess risk and return. By also considering factors like financial health, management capabilities, and borrowing requirements, it looks to benefit from high yield securities.
Per Rosenbluth’s previous discussion of the strategy, EVLN leans on Eaton Vance’s 30 years of experience managing floating rate strategies. The ETF also benefits from MSIM’s 40-plus-person team of analysts, he noted.
Adding income to the portfolio could help investors. EVLN’s flows suggest it may offer some momentum moving forward, with the senior loan ETF just one option to consider among MSIM’s ETFs.
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