Whitepaper: The Case for Active Management within Agency MBS
Key Takeaways
- Investors should consider an allocation to agency MBS because, as an asset class with little to no credit risk, it has historically delivered strong absolute and risk-adjusted returns, with low correlation to equities.
- MBS have demonstrated their defensive capabilities across a variety of market conditions, making it an attractive asset class in today’s environment.
- MBS’ favorable liquidity profile combined with its inherent complexity creates alpha opportunities, making it an attractive candidate to potentially add both alpha and diversity in sources of return to an investor’s portfolio.