Relative value opportunities exist in the Securitized Fixed Income space, but can be difficult to find. We believe active managers with a focus on fundamental research may be able to identify securities priced below their intrinsic value.
We believe the best approach to this asset class is:
- A focus on moderate to higher risk/return opportunities within securitized products
- Maintaining high spread/short spread duration portfolios to reduce volatility
- Having longer holding periods to enable realization of yield advantages