Calvert Ultra-Short Investment Grade ETF

CVSB

Market cap $208M

Eaton Vance has expanded its active fixed-income offerings with the launch of a mortgage-backed securities (MBS) ETF. Listed on NYSE Arca, the Eaton Vance Mortgage Opportunities ETF (EVMO) was created through the conversion of the Morgan Stanley Mortgage Securities Trust (MTGDX) mutual fund.

With memories of Monday's sell-off fresh on investors' minds, all eyes remain fixated on the Federal Reserve's next moves. At a recent event in Hawaii, San Francisco Fed President and CEO Mary Daly reiterated that within the Federal Reserve, minds remain “quite open to adjusting the policy rate in coming meetings.

Uncertainty currently reigns supreme with investors and traders alike trying to anticipate where the economy is headed. Fortune reported that a recent survey from Deutsche Bank found that 45% of investors see the U.S. economy reaching a “no landing” scenario.

Morgan Stanley Investment Management's lineup of ETFs has grown to over half a billion dollars in assets since their launch last year. The firm entered the ETF space one year ago with the launch of six Calvert ETFs.

The first actively managed exchange traded funds came to market in 2008. But 2023 may be remembered as the year when the asset class matured, paving the way for broader long-term adoption.

With stocks racing to record highs, diminishing expectations of a recession, and hopes that the Federal Reserve could potentially reduce interest rates multiple times next year, risk appetite is being reborn.

In recent weeks, chatter has increased regarding the likelihood of the Federal Reserve lowering interest rates at some point in 2024. Obviously, that would be good news for high yield and long-duration fixed income strategies.

November was kind to fixed income investors as bonds posted their best month of 2023. High yield corporate debt participated in that rally as highlighted by the fact that the largest junk bond exchange traded fund is higher by nearly 4.3% over the past month.

Once a sparsely populated afterthought within the broader ETF industry, active ETFs are flourishing. That's true both in terms of population and, more importantly, assets under management.

Arguably, no investing style has been on the receiving end of as much criticism as environmental, social, and governance (ESG) investing. For its supporters and those interested in implementing its benefits in their portfolios, the good news is that while they're loud and vocal, the critics don't speak for all market participants.