The current macroenvironment is offering fixed income investors a plethora of options, especially when it comes to attaining yield. However, the Eaton Vance Total Return Bond ETF (EVTR) should be on their radar, especially if they’re looking for core exposure in an active fund at a relatively low cost.
With the higher-for-longer interest rate narrative continuing, it’s an ideal time to lock in yields now before they eventually head south. Even then, investors can reap the benefits of bond price appreciation should yields eventually fall in tandem with rates.
That said, there’s still a lot of uncertainty ahead for the bond market, especially with a presidential election forthcoming. Bond investors are well aware of what volatility can bring, especially in the past few years, and this year is no different.
“Bond prices and interest rates move in opposite directions, so bond market volatility was high in 2022 and 2023, when the Federal Reserve raised the federal funds rate at a record pace,” personal finance site Kiplinger noted. “But uncertainty about the path of interest rates can destabilize bonds, too, so price swings have continued into 2024.”
That said, having active management can help quell any anxiety from any impending volatility this fall.
Active Flexibility at a Low Cost
Active management can allow for flexibility in an uncertain market. It allows portfolio managers to adjust holdings as necessary when market conditions warrant a change. Furthermore, the fixed income team managing EVTR has the knowledge and experience to deftly navigate a bond market that comes with its own set of complexities.
With the fund’s benchmark being the Bloomberg U.S. Aggregate Index, EVTR offers a core bond solution for investors looking to add the fund as a stand-alone product for core exposure or to complement a current bond portfolio with an active option. Either way, investors get a deeply diversified fund with over 500 holdings that encompass a spectrum of bonds ranging from safe haven Treasuries to higher-yielding bonds.
Furthermore, investors get the active component at a relatively low expense ratio of 0.39%. As of June 20, the 30-day SEC yield is at 5.17%.
Salient benefits of EVTR per the product website:
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- Provides a core plus fixed income holding exposure to a diversified mix of investment grade fixed income securities, as well as opportunistic investments in higher-yielding fixed-income securities
- The fund’s active management harnesses the expertise of our Broad Markets Fixed Income team, which employs a multisector, top-down/bottom-up investment approach.
- Access a low-cost, transparent and tax-efficient ETF that seeks competitive performance and attractive yields.
For more news, information, and analysis visit The ETF Yield Channel.