Chart of the Week: Legacy Non-Agency RMBS Outperforms Other Fixed Income Assets

Chart of the Week | July 05, 2021
Macro Insights

Legacy Non-Agency RMBS Outperforms Other Fixed Income Assets

  • Legacy Non-Agency RMBS outperform all other asset classes by over 2.5x over the past seven years.
  • Legacy Non-Agency RMBS amortize meaning that every month the bond gets safer as underlying loans and mortgage deals de-lever.
  • The combination of a robust housing market, market leading credit spreads, declining default rates, improving underwriting standards, uncorrelated returns, and positive selection bias (weaker loans already liquidated) all present legacy non-agency RMBS as a unique investment opportunity.
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Hunter Frey, Analyst
Hunter Frey, Analyst
Hunter Frey is an Analyst at Catalyst Capital Advisors, LLC and Rational Advisors Inc. covering all in-house equity strategies and an insider buying income-oriented strategy at Catalyst Funds. Mr. Frey received a Bachelor of Science degree in International Business with a focus in Spanish from Gardner-Webb University, Godbold School of Business, and is in pursuit of a Master of Business Administration in Economics and Finance from New York University, Stern School of Business.

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