Episode 77: Agency MBS: From Zero to Hero
About this episode
The episode discusses the recent significance of Agency mortgage-backed securities in investment strategies and the factors influencing this shift.
For two decades, we typically looked past Agency mortgage-backed securities (MBS) to find better relative value opportunities in the non-government sponsored credit markets. But something fundamental changed, and over the past three years these securities have claimed an increasingly significant allocation in our total return strategies. What sparked this pivot? Portfolio Manager Adam Bloch and Louis Pacilio from our Structured Credit team unpack the mechanics of the Agency MBS market, explain what shifted in the risk-reward equation, discuss the future of Fannie Mae and Freddie Mac, and explore the opportunity going forward. Related Content: Fourth Quarter 2025 Fixed-Income Sector Views Relative value across the fixed-income market. Read Fixed-Income Sector Views The ABCs of Asset-Backed Finance Finding value in complexity: The structure, risks, and investor-friendly features of asset-backed finance. Read The ABCs of Asset-Backed Finance Macro Markets Podcast Episode 76: Why and Where (and How) to Invest in Asset-Backed Finance Relative value opportunities in ABS, CLOs, and residential and commercial MBS, as well as insights into the process for managing these complex…
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