A sound investment process and strong management team underpin Eaton Vance High Yield ETF's Morningstar Medalist Rating of Silver. The portfolio maintains a cost advantage over competitors, priced within the least expensive fee quintile among peers.  

 The strategy's sensible investment philosophy earns it an Above Average Process Pillar rating. The strategy’s management team earns an Above Average People Pillar rating. The strategy's parent organization earns the firm an Average Parent Pillar rating. People Pillar and Parent Pillar ratings for this strategy are indirectly assigned by a Morningstar analyst rather than algorithmically derived. Please see the notes following each pillar section for more details. The details of assigning methods can be found in each pillar section.

Analyst Rating

Morningstar's evaluation of this fund's process seeks to understand management's investment philosophy, and whether it has been applied consistently over time and can add value across the market cycle. Eaton Vance High Yield ETF earns an Above Average Process Pillar rating.    The most important driver of the rating is the parent firm's five-year risk-adjusted success ratio of 62%. The measure indicates the percentage of a firm's funds that survived and outperformed their respective category's median Morningstar Risk-Adjusted Return for the period. The parent firm's excellent risk-adjusted performance, as shown by its average 10-year Morningstar Rating of 3.4 stars, also strengthens the process. Lastly, the process is limited by the parent firm's five-year retention rate of 77%, which suggests it could do more to hold onto its portfolio managers.

 Compared with other funds in the High Yield Bond Morningstar Category, this fund maintains  similar interest-rate sensitivity over the past few years. 

  The portfolio's average surveyed credit quality is on par with peers, with both the fund and the average being rated B.

Above Average

Process

Eaton Vance High Yield ETF earns an Above Average People Pillar rating. The team is backed by Brandon Matsui, the longest-tenured manager on the strategy, who provides over 25 years of listed portfolio management experience. The average Morningstar Rating of the strategies they manage is 4.0 stars, demonstrating stellar risk-adjusted performance. The team boasts an experienced corps of listed portfolio managers, with three others supporting Brandon Matsui. Together, they average 23 years of listed portfolio management experience.  None of the managers here invest any money in the strategy, which is disappointing, as such investments help align managers' interests with fundholders.

 Note: The People Pillar rating is indirectly assigned by an analyst. The longest-tenured manager of the fund also manages a different product rated by an analyst. Their analyst-assigned People Pillar rating is combined here with the People scores (algorithmic or analyst-assigned) for the fund’s other managers on a tenure-weighted basis.

People

Morgan Stanley Investment Management, the asset-management arm of Morgan Stanley MS, has made progress in integrating Eaton Vance's capabilities, but there remains more to be done. It retains its Average Parent rating.
Since acquiring Eaton Vance in March 2021, MSIM has been conservative in its approach to the merger. The firm kept Eaton Vance's legacy equity team a distinct platform from MSIM's own substantial capabilities, and it now offers several funds with potentially competing mandates. On the other hand, it moved relatively quickly to centralize the two legacy firms' fixed-income platforms, though several team leaders retired or departed the firm over 2021 and 2022. 
Although Counterpoint Global's concentrated growth strategies, historically among MSIM's largest offerings, have struggled through 2021 and 2022, some of Eaton Vance's boutiques, including value-equity shop Atlanta Capital, help create a more-diversified lineup. MSIM has leveraged Calvert's substantial experience in sustainable investing to launch a series of Calvert-branded strategies both in the United States and Europe, and Parametric allows MSIM to compete in the fast-growing area of customized separate accounts. The firm has yet to demonstrate, however, that it has leveraged its increased size and scale to streamline and improve its operations or to systematically lower fees for its investors.

Average

Parent

Eaton Vance High Yield ETF

EVHY is actively managed, investing in a broad portfolio of US corporate high yield debt securities with varying maturities. The fund aims for high levels of income and capital growth.

In the world of corporate bonds, there's either investment-grade or non-investment-grade debt, also known as a junk bond. Junk-rated corporates typically earn that dubious status because of debt burdens and other balance sheet woes at issuing firms.

Increasing Quality Traits Could Diminish Junk Bond Risks

Eaton Vance Floating-Rate ETF

Is now the time for adding some more income to portfolios? Investors are facing growing uncertainty as a higher for longer interest rate regime appears more likely than ever.

Don't Miss This Pair of Current Income ETFs

The latest remarks from the Federal Reserve are reinforcing the case for high yield bonds. On Wednesday, Federal Reserve Chair Jerome Powell indicated that the Fed is sticking to the current plan and keeping rates steady for now.

Rate Reassurance Fuels High Yield Bond Interest

Calvert US Large-Cap Diversity Equity And Inclusion Index ETF

Calvert International Responsible Index ETF

Calvert US Large-Cap Core Responsible Index Etf

Calvert US Mid-Cap Core Responsible Index Etf

Calvert Ultra-Short Investment Grade Etf

Calvert US Select Equity Etf

Eaton Vance Intermediate Municipal Income ETF

Eaton Vance Ultra-Short Income ETF

Parametric Equity Premium Income ETF

Parametric Hedged Equity ETF

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.

Morgan Stanley Investment Management's Calvert ETFs Turn 1

It's important to remember that high yield ETF exposure is an essential part of a well-diversified portfolio. Some advisors may be tempted to forgo high yield exposure due to its riskier profile compared to other fixed income investments.

Under the Hood of the Eaton Vance High Yield ETF

Morgan Stanley Investment Management listed five new active ETFs on NYSE Arca. The ETFs span asset classes and include one Parametric alternative income strategy, one Parametric hedged equity strategy, and three Eaton Vance fixed income strategies.

News for Eaton Vance High Yield ETF ETF (EVHY)