Mortgage-Backed Securities

The US Agency Mortgage-Backed Securities (MBS) market is the world’s second largest bond market after the US Treasuries market, making it one of the most liquid markets globally.

Our strategy mainly invests in agency MBS (e.g. in securities issued by US institutions such as Ginnie Mae, Freddie Mac and Fannie Mae) which are rated AAA and have a US government guarantee. So agency MBS have the same top-level credit rating as a US Treasury security. Therefore, even in low risk periods, agency MBS may outperform investment grade credit and other riskier bonds.

Why this asset class?

The team managing the US mortgage strategy has a sharp focus on security selection. They spend most of their time looking for bonds with attractive characteristics that should produce a high risk-adjusted return. The award-winning lead portfolio manager John Carey has been managing this strategy at the firm since 1998.

Key strengths of our US Mortgage strategy

  • Relatively strong returns from high-quality bonds with low correlations to the returns of traditional asset classes
  • Targeting positive total returns regardless of the market environment by focusing on opportunities in US agency MBS rated AAA
  • A very experienced and stable portfolio management team

US Agency Mortgage-Backed Securities

A macro view on the US Agency MBS market