We anticipate cheaper entry points into mezzanine and subordinate CLO tranches, and esoteric ABS.
Improving fundamentals, lower bond prices, and limited supply form a constructive thesis for non-Agency RMBS.
A frenzied rally in April will moderate as Wall Street restarts its CMBS production engine.
While commercial real estate fundamentals remain strong, strains on loan supply could cause borrowing costs to tick higher in 2016.
We selectively favor bonds supported by dedicated revenue streams.
U.S. housing market dynamics and low/negative rates overseas should drive demand for Agency MBS.
U.S. rates products will remain relatively attractive, given extremely low to negative global bond yield levels.
While spreads have since narrowed, we are still finding bargains in high-yield bonds and bank loans.
Agency MBS offers an opportunity to diversify volatility and liquidity risk as we near the end of the credit cycle.
Recent spread widening across several areas of the ABS market, particularly in post-crisis mezzanine CLOs, creates a compelling entry point.
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