Consuelo Mack's WealthTrack Preview: Guest: Kathleen Gaffney, Manager, Eaton Vance Bond Fund

Ted

FYI:
Regards,
Ted
February 14, 2019

Dear WEALTHTRACK Subscriber,

18th century British nobleman Baron Nathan Mayer Rothschild is alleged to have said: “Buy when there is blood in the streets.” He supposedly made a fortune speculating when Napoleon was defeated at Waterloo. We know for a fact that legendary 20th century investor Sir John Templeton followed his: “Buy in periods of maximum pessimism” principle to great success.

If you were to name places in the world where you wouldn’t consider investing today what comes to mind? How about Venezuela where the economy is in ruins, the president discredited and the opposition mounting? Or a specific company in this country like Pacific Gas and Electric, PG&E for short, the California utility that filed for bankruptcy and bore the physical and legal brunt of the recent devastating California wild fires? Those are fertile ground for contrarian investors, or just traditional value investors who look for opportunities where others fear to tread.

This week’s guest is just such an investor. Her specialty is fixed income but she has the latitude to invest around the world, anywhere in a company’s capital structure and she revels in the hunt. She is Kathleen Gaffney, Director of Diversified Fixed Income at Eaton Vance where she is also the lead portfolio manager of the Eaton Vance Multisector Income Fund, which she launched as the Eaton Vance Bond Fund when she joined the firm in early 2013.

The fund is known for its flexibility to seek higher total return opportunities wherever available in the world and the capital structure of the companies chosen. That approach has also meant “significantly more volatility” than its peers in Morningstar’s Multisector Bond category. It carries a 3-star rating but is ranked in the top one percentile for the last 3 years, the middle of the pack for the last 5 and has beaten its benchmark since inception.

Gaffney is also lead portfolio manager of the somewhat more traditional Eaton Vance Core Plus Bond Fund. It carries a 5-star rating and has ranked in the top performance percentiles for the last 3 and 5 year periods under her leadership.

The last time I sat down with Gaffney in late 2017 she told us we were at an important inflection point, shifting from a secular decline in interest rates to a gradual rise. She will share her views of where we stand now.

If you’d like to watch any of our programs ahead of their official broadcast they are available to our PREMIUM viewers on our website about 24 hours before. You’ll also find the EXTRA interview with Kathleen Gaffney about her technique to keep mentally fresh.

If you would prefer to take WEALTHTRACK with you on your commute or travels, you can now find the WEALTHTRACK podcast on TuneIn, Stitcher, and SoundCloud as well as iTunes and Spotify.

Thank you for watching. We hope you had a happy Valentine’s Day. Make the week ahead a profitable and a productive one.

Best regards,
Consuelo

Video Clip:


M* Snapshot EVBAX:
https://www.morningstar.com/funds/XNAS/EVBAX/quote.html

Lipper Snapshot EVBAX:
https://www.marketwatch.com/investing/fund/evbax

EVBAX Is Unranked In The (MB) Fund Category By U.S. News & World Report:
https://money.usnews.com/funds/mutual-funds/multisector-bond/eaton-vance-multisector-income-fund/evbax

Old_Skeet

@Ted: Thanks for posting the featured spot on Ms. Gaffney. I have always enjoyed hearing her perspectives. At one time I held her fund (EVBAX) along with (NEFZX) now run by her former boss, Dan Fuss, at Loomis Sayles. I let her fund (EVBAX) go and kept NEFZX because both of these funds together just put too much risk in my income sleeve, for my taste.

Sven

EVBAX Is Unranked In The (MB) Fund Category By U.S. News & World Report:

EVBAX portfolio is similar to Loomis Sayles Bond fund. Invested with it early on and left when it turned out to be even more volatile than LS fund. Last year this fund lagged badly, -5.7%.