After a bright start, US mortgage-backed securities face a sunnier year in which this fixed income asset class could reverse part of the gloomy outcome of a challenging and volatile 2022. With the peak in inflation behind us and the end of the US Federal Reserve’s rate rising cycle in sight, investors have an opportunity to benefit from a likely bounce-back.
In this Talking heads podcast, John Carey, head of structured securities, tells chief market strategist Daniel Morris that the mortgage-backed securities (MBS) segment now presents a reasonable choice for fixed income investors. It offers the prospect of significant yield pick-up relative to US Treasuries, high credit quality and stable cash flows in a market environment where recession could cloud the appeal of corporate bonds and equities.
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Any views expressed here are those of the author as of the date of publication, are based on available information, and are subject to change without notice. Individual portfolio management teams may hold different views and may take different investment decisions for different clients. This document does not constitute investment advice.
The value of investments and the income they generate may go down as well as up and it is possible that investors will not recover their initial outlay. Past performance is no guarantee for future returns.
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The information presented is a general market outlook for MBS (mortgage backed securities). It is not representative of any recommendation for investment advisory services. This asset class are not suitable for all investors. Any returns mentioned are intended as general indications of the market and not reflections of our management of this asset class.