Just as we were discussing why actively-managed bond ETFs may be doing better than actively-managed equity ETFs, Eaton Vance has stepped into the field by filing to launch 5 active bond ETFs. Eaton Vance is a Boston-based asset manager that is a giant in the closed-end fund space, managing in excess of $163 billion as of Dec. 31, 2009, $42.7 billion of which was in fixed-income investments. Eaton Vance first announced its interest in the ETF industry back in Aug 2008, and coming from such an established player in the asset management industry, this was seen as a major thumbs-up for the ETFs as whole.
Now, with plans for 5 fixed-income actively-managed ETFs, Eaton Vance has jumped a few steps to enter the one of the fastest growing ETF segments. Active ETFs were already managing more than $273 million in assets as of March 1, 2010 spread across 17 products in the US, with the fixed-income Active ETFs recording the fastest growth. Specifically, the 5 ETFs planned by Eaton Vance are the following:
1. Eaton Vance Enhanced Short Maturity: Seeks maximum current income by investing at least 65% of assets in US$ investment-grade debt.
2. Eaton Vance Government Limited Maturity: Seeks maximum current income by investing at least 80% of its assets in bonds issued or guaranteed by the US government or its agencies.
3. Eaton Vance Intermediate Municipal Bond: Seeks tax-exempt income by investing at least 80% of its assets in US$ bonds exempt from federal taxes.
4. Eaton Vance Prime Limited Maturity: Seeks maximum current income by investing at least 65% of its assets in US$ investment grade securities.
5. Eaton Vance Short Term Municipal Bond: Seeks tax-exempt income by investing 80% of its assets in short-term bonds exempt from federal taxes.
What’s most interesting about the range of products announced by Eaton Vance is how remarkably similar they look to PIMCO’s existing and planned active bond ETFs. To illustrate, these are PIMCO’s active bond ETFs:
1. PIMCO Enhanced Short Maturity (MINT)
2. PIMCO Intermediate Municipal Bond (MUNI)
3. PIMCO Short Term Municipal Bond Fund (SMMU)
4. PIMCO Prime Limited Maturity Strategy Fund (PPRM) – planned
5. PIMCO Government Limited Maturity Strategy Fund (GOVY) – planned
It definitely looks like Eaton Vance is targeting PIMCO’s share, with MINT already raking in $136 million, and plans to compete on exactly the same terms and in exactly the same market. From an investor’s point of view, it couldn’t be better!
Disclosure: No positions in above-mentioned names.