Buy Mortgage Backs, Floaters Ahead of Fed Hikes Says Eaton Vance Manager

Investors seeking to minimize interest rate risk in the face of looming Fed rate hikes should seek out a short term bond fund, said Andrew Szczurowski, portfolio manager for the Eaton Vance Short Duration Strategic Income Fund. Szczurowski added that the weak March jobs report probably pushed back a potential June rate hike until September. He said bad weather distorted the economic data in the first quarter just like it did last year, but the data arriving this spring will show a stronger economy and the Fed needs time to get comfortable with the improved data before making a move. Szczurowski is investing in interest only agency mortgage backed securities and floating rate loans which he said fare better in a rising rate environment.