MBS: An opportunity set for absolute return

In this overview of the US agency mortgage-backed securities (MBS) market, our fixed income team examines the agency MBS opportunity set, highlighting its risk-return profile and providing a case study of historical performance in a rising rate environment. The discussion emphasizes how the asset class can play a role within absolute return strategies.

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Fixed income securities and bond funds can lose value, and investors can lose principal, as interest rates rise. They also may be affected by economic conditions that hinder an issuer’s ability to make interest and principal payments on its debt.

Bond risk and interest payments on inflation-indexed debt securities will vary as the principal and/or interest is adjusted for inflation.

High yielding, non-investment-grade bonds (junk bonds) involve higher risk than investment grade bonds.

The views expressed represent the Manager's assessment of the market environment as of August 2017, and should not be considered a recommendation to buy, hold, or sell any security, and should not be relied on as research or investment advice. Views are subject to change without notice and may not reflect the Manager's views.


Investing involves risk, including the possible loss of principal.

Past performance does not guarantee future results.

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