FTF - EVG: A Good Choice For Income But May Underperform A Regular Bond Fund
2024-06-12 18:42:13 ET
Summary
- Eaton Vance Short Duration Diversified Income Fund offers a high yield of 8.67%, beating most debt indices, but this is lower than its peers.
- The EVG closed-end fund's price performance over the past three years has been better than its peers, which is probably due to its leverage not being as high as some of them.
- The fund employs leverage to boost yield, with a leverage ratio at the median level compared to peers, covering distributions with unrealized gains.
- The fund has a surprising amount of foreign exposure, particularly in emerging markets. This should boost its income compared to an all-domestic bond fund.
- The fund is covering its distribution and trades at a slight discount to net asset value.
The Eaton Vance Short Duration Diversified Income Fund ( EVG ) is a closed-end fund that provides a method for investors to obtain a high level of income from the assets in their portfolios. The fund manages to do fairly well at this task, as its shares currently boast an 8.67% yield, which is higher than most of the domestic fixed-income indices:
| Index |
| TTM Yield |
| Bloomberg U.S. Aggregate Bond Index ( AGG ) |
| 3.46% |
| Bloomberg High Yield Very Liquid Index ( JNK ) |
| 6.62% |
| ICE Exchange-Listed Preferred & Hybrid Securities Index ( PFF ) |
| 6.28% |
| JPMorgan Ultra-Short Income ETF ( JPST ) |
| 4.82% |