Eaton Vance Short Duration Income ETF

EVSD

Market cap $652M

Investors increasingly seek refuge in bonds at the end of the first quarter as economic uncertainty grows. With recession and inflation risks on the rise, bonds hold strong appeal for their low correlations to equities.

With uncertainty and tariff concerns roiling the equity markets, many investors are looking to fixed income as a safe haven.  That said, investors should carefully consider which sectors of fixed income they choose to allocate assets toward.

Markets plummeted Thursday as continuously changing U.S. trade policies heighten investor uncertainty across equities and fixed income. Major equity indexes fell, while the dollar weakened further.

Approximately two years ago, just before an Exchange conference kicked off, one of the largest asset managers entered into the ETF market. Morgan Stanley Investment Management (MSIM), home to some of the strongest asset management brands, launched their initial suite of ETFs in January 2023.

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.

With the Fed's agenda underway, investors are trying to figure out how to best position their fixed income portfolio for long-term results.

With the Federal Reserve's next interest rate meeting about a month away, investors may wish to take this time to reassess the duration of their bond portfolios and consider short-duration fixed income ETFs. As of now, it may be for the benefit of investors to keep their bond duration relatively low.

With the Federal Reserve due to meet in less than a week, investors are confident that we will see the first interest rate cut of the year very soon. One efficient means to capitalize on the upcoming rate cycle is to use short duration bonds and bond ETFs.

Market outlooks and expectations continue to evolve in the second half on changing economic data, risks, and investor sentiment. Albert Giroux, portfolio specialist, broad markets fixed income at Morgan Stanley Investment Management, discussed what the team sees looking ahead for bond markets in a recent video.

With all the talk about the Federal Reserve nearing its first interest rate cut in September, it's unsurprising that many fixed income investors are considering adding more duration to their portfolios. Some experts are even encouraging that move.