Eaton Vance Management announced Monday the launch of a total return mutual fund designed with a flexible strategy that provides broad exposure to global investment opportunities, including many typically unrepresented in conventional investor portfolios.
As an absolute return fund, the new Eaton Vance Global Macro Absolute Return Advantage Fund (Class A: EGRAX, Class C: EGRCX, Class I: EGRIX), benchmarks performance primarily against short-term cash instruments and expects to provide returns over the long term that are "substantially" independent of movements in the stock and bond markets.
Boston-based Eaton Vance Management, a subsidiary of Eaton Vance Corp., which managed $173.3 billion in assets as of July 31, uses macroeconomic and political analysis to identify global opportunities in both developed and emerging markets. The new fund's investments will normally consist primarily of positions in the debt, currencies, and interest rates of sovereign nations. The fund may also invest in corporate debt and equity, municipal obligations, and commodities. Under normal market conditions, the fund invests at least 40% of its net assets in foreign investments and may have significant exposure to foreign currencies and derivative instruments.
"We're country pickers," said Michael Cirami, co-portfolio manager, in a statement. "We seek to identify disconnects between a country's fundamentals and the pricing of assets in its investment markets."
The fund's flexible strategy allows for implementation of long positions in markets believed to be strong or improving, but also short positions as well, Cirami. "Deteriorating markets can often represent some of the most compelling opportunities. Narrower mandates could miss them," he said.
Portfolio manager Michael Cirami discusses Eaton Vance's global macro investment philosophy and approach to risk management at boston.videolinktv.com/extranet/ev_aug27. A new micro-site, www.eatonvance.com/gfi, provides additional information about absolute return investing and the firm's global macro investment approach.
The fund is managed by Eaton Vance's Global Fixed Income group, also responsible for managing the firm's Global Macro Absolute Return, Strategic Income, Emerging Markets Local Income, and International Income Funds, which had combined assets under management of $11 billion as of August 31. The new fund differs from the others because it has reduced exposure to investments in frontier markets, which frees the fund from capacity constraints that limit growth potential of the original product, and it targets higher levels of potential return while taking on the risk of greater volatility.
Read about why one financial advisor picks Eaton Vance Global Macro Absolute Return in a rising interest rate climate from the archives of AdvisorOne.com.