July 19, 2019 / 3:09 PM / 5 months ago

Two top fixed-income portfolio managers exit Eaton Vance

FILE PHOTO: Kathleen Gaffney, vice president, director of diversified fixed income and lead portfolio manager for Eaton Vance Management, speaks during the Reuters Global Investment 2019 Outlook Summit in New York, U.S., November 16, 2018. REUTERS/Brendan McDermid

(This July 19 story corrects to say the fund has a negative process pillar rating, not negative overall rating, in the fifth paragraph)

By David Randall and Kate Duguid

NEW YORK (Reuters) - Bond fund managers Kathleen Gaffney and Henry Peabody left Eaton Vance Corp at the end of June and have been replaced by existing members of the firm’s fixed-income team, a spokeswoman told Reuters.

Among other duties, the pair managed the $364 million Eaton Vance Multisector Income fund, whose 6.1% annualized return over the last 3 years puts it in the top 8th percentile among the 296 funds in its Morningstar category. Over the last year, however, the fund has returned 3.2%, dropping it into the 97th percentile among its peers over that time period.

Peabody told Reuters he has since joined MFS Investment Management, while Gaffney said separately that she is still in the process of determining to which firm she will move.

Eaton Vance said the two left to pursue “other opportunities” and Gaffney and Peabody would not say why they left.

The management shakeup does not affect the fund’s rating, Morningstar wrote in a report. The fund currently has a negative process pillar rating due to its concentrated risks.

“While it is possible that there will be changes to the approach under its new management team, there is not enough information to revisit the Process rating at this point,” the report said.

Gaffney joined Eaton Vance in 2012 after co-managing the then-$22 billion Loomis Sayles Bond Fund with investor Dan Fuss.

Reporting by David Randall and Kate Duguid; Editing by Jennifer Ablan and Dan Grebler

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