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By Kenneth Oshodi | 02-05-2018 10:00 AM

A High-Yield Fund That's Strong on Several Fronts

Silver-rated Eaton Vance Income Fund of Boston uses a macro overlay to dampen portfolio volatility as part of its effective process.

Ken Oshodi: Due to its experienced team, sensible process, and competitive returns, Eaton Vance Income Fund of Boston is strong on several fronts.

Comanagers Mike Weilheimer and Stephen Concannon lead this effort. Weilheimer has run the fund with success since 1996, and Concannon joined him in late 2014. Like many high-yield teams, this group takes a bottom-up approach to managing its portfolios. It also utilizes a macro overlay to dampen portfolio volatility. It began doing so after a difficult 2008, which also led to a reduction in the fund's typical allocation to lower-quality CCC-rated debt, although the team will increase this stake when it feels that valuations warrant risk. 

While this thoughtful approach to lower-quality exposure has proven to be a headwind for the fund at times, the fund has also shown consistent strength among peers during periods when credit markets have struggled, and its 7.3% annualized return over the 10-year period ended January 2018 easily outperforms its median peer's return.

All told, the strength of its management team, effective process, and solid returns reinforce Eaton Vance Income Fund of Boston's Morningstar Analyst Rating of Silver.

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