Eaton Vance Ultra-Short Income ETF (EVSB)

The Morgan Stanley ETF Trust focuses on the Morgan Stanley Emerging Markets Short-Term Bond ETF (EVSB), which is designed to enhance income generation while safeguarding capital through investments in high-quality, short-term securities. The fund primarily targets investment-grade securities with a strong emphasis on the banking sector, reflecting its strategy to leverage opportunities within this key financial segment. In addition to its banking sector focus, EVSB includes holdings in U.S. bonds, pooled investment vehicles, and asset- and mortgage-backed securities.

The fund's investment portfolio predominantly consists of U.S. dollar-denominated securities, ensuring stability and minimizing currency risk associated with foreign investments. However, up to 25% of its total assets may be allocated to foreign debt securities, allowing for diversification and exposure to global markets.

While EVSB maintains a conservative investment approach, it retains the flexibility to invest in below-investment-grade securities, though such investments are limited to a maximum of 10% of the fund's assets. This feature provides an opportunity to enhance yields while managing credit risk. The fund's typical portfolio duration is set to one year or less, aiming to reduce interest rate risk and maintain liquidity. However, during periods of heightened market volatility, the duration may extend to navigate market conditions effectively.

As a specialized ETF, the Morgan Stanley Emerging Markets Short-Term Bond ETF (EVSB) caters to investors seeking a blend of income generation and capital protection through a well-managed portfolio of short-term, high-quality securities. Its strategic focus on the banking sector and flexible investment approach, combined with rigorous research and ESG considerations, makes it a compelling choice for investors aiming to balance risk and return in the short-term bond market.