Stock Analysis & Valuation Eaton Vance Floating-Rate Income Trust (EFT)

• Previous Close: $11.39
• Sector Valuation Confidence Level: High

Valuation method	Value, $	Upside, %
Artificial intelligence (AI)	40.60	256
Intrinsic value (DCF)	20.19	77
Graham-Dodd Method		n/a
Graham Formula		n/a

Strategic Investment Analysis

Company Overview

Eaton Vance Floating-Rate Income Trust (NYSE: EFT) is a closed-end fixed income mutual fund managed by Eaton Vance Management, specializing in senior secured floating-rate loans. Launched in 2004, the fund primarily invests in U.S. fixed-income markets, targeting diversified sectors to generate high current income while mitigating interest rate risk. Benchmarking against the S&P/LSTA Leveraged Loan Index, EFT offers investors exposure to floating-rate debt instruments, which adjust with market rates, making them resilient in rising-rate environments. With a market cap of approximately $321 million, EFT is a strategic choice for income-focused investors seeking stability in volatile markets. The fund’s disciplined approach to credit selection and sector diversification positions it as a key player in the asset management-income sector, appealing to those prioritizing yield and capital preservation.

Investment Summary

Eaton Vance Floating-Rate Income Trust (EFT) presents an attractive option for income-seeking investors, given its focus on senior secured floating-rate loans, which provide protection against rising interest rates. The fund’s net income of $55.3 million and diluted EPS of $2.11 reflect robust performance, supported by $83 million in operating cash flow. A dividend yield of ~5.6% (based on a $1.151 annual dividend) enhances its appeal. However, risks include exposure to credit quality deterioration in leveraged loans and reliance on Eaton Vance’s management expertise. The fund’s low beta (0.47) suggests lower volatility relative to the market, but its $192 million debt load warrants monitoring. Overall, EFT is a compelling pick for conservative fixed-income portfolios, though macroeconomic headwinds could impact loan performance.

Competitive Analysis

EFT’s competitive edge lies in its niche focus on senior secured floating-rate loans, a segment less correlated with traditional fixed-income assets. Managed by Eaton Vance, a subsidiary of Morgan Stanley, the fund benefits from institutional-grade credit analysis and sector diversification. Its benchmark alignment with the S&P/LSTA Leveraged Loan Index ensures transparency and performance accountability. However, the fund faces competition from both active and passive floating-rate income strategies, including ETFs and open-end mutual funds. EFT’s closed-end structure allows for leverage (19% debt-to-assets), amplifying returns but also risks. Competitors with lower fees or broader mandates may appeal to cost-conscious investors. EFT’s advantage is its concentrated expertise in leveraged loans, but its smaller AUM ($321M) limits scale benefits compared to larger peers. The fund’s success hinges on credit selection and rate environment adaptability.

Major Competitors

• Blackstone Strategic Credit Fund (BGB): BGB, managed by Blackstone, focuses on leveraged loans and high-yield bonds, offering broader diversification than EFT. Its larger AUM provides economies of scale but may dilute floating-rate loan exposure. Blackstone’s deep credit resources are a strength, though fees are higher.
• BlackRock Floating Rate Income Strategies Fund (FRA): FRA emphasizes floating-rate bank loans, similar to EFT, but with BlackRock’s global reach. Its lower expense ratio and larger size may attract cost-sensitive investors. However, EFT’s Eaton Vance affiliation offers specialized leveraged loan expertise.
• Nuveen Floating Rate Income Fund (JFR): JFR, managed by Nuveen, targets floating-rate debt with a higher yield focus. Its Nuveen brand appeals to retail investors, but EFT’s tighter sector focus may offer better risk-adjusted returns in volatile markets.