Eaton Vance Short Duration Municipal Income ETF

EVSM

Market cap $720M

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.

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.

Today, Eaton Vance expanded its muni fund lineup with the launch of the Eaton Vance High Income Municipal ETF (EVYM).  EVYM's objective is to generate a high degree of current income that is exempt from regular federal income tax.

More evidence is mounting that investors are increasingly looking to fill their portfolios with muni bonds.  Last week, VettaFi hosted its Q1 2025 Fixed Income Symposium.

It's certainly no secret that municipal bonds enjoyed a relatively strong performance in 2024.  That being said, the question remains: how will munis stack up against other fixed income categories in 2025?

I updated my universe of exchange-traded funds to track based on superior long-term performance. Nearly 450 ETFs are ranked based on short-term monthly returns, exponential moving average, and money flows into funds. With valuations and concentrations high, I select twenty trending ETFs Lipper Categories with less risk of correction in 2025 for further analysis.

The growth of active ETFs has propelled a wave of mutual fund-to-ETF conversions. Nearly 80% of all new product launches in both the third quarter and for the full year have been actively managed.

It's no secret that the commercial real estate market has been struggling for a while now. However, muni bond fundamentals remain strong.

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.

Flows into fixed income ETFs continue this week on interest rate cut hopes. Investors looking to increase allocations to their bond portfolio would do well to consider the actively managed fixed income ETF suite from Eaton Vance.