EVSB offers a near-5% yield by investing in a mix of corporate and securitized debt, but underperforms compared to VGUS due to price return. The ETF's higher expense ratio and longer average duration increase risk without delivering superior total returns, making it less attractive for risk-averse investors. Despite a solid yield, EVSB's significant exposure to non-investment grade debt and current market risk-off sentiment justify a Hold rating.
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.
While some investors are banking on the market heralding in growth this year, many experts remain wary of inflation. This is due in part to the uncertainty surrounding the economic effects of the new U.S. administration's policies.
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.