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Commentary - page 2
2024 Market Outlook
We believe the Federal Reserve’s policy turn is finally here. The Fed’s easing cycle will be supportive of lower interest rate volatility, which should be supportive of outperformance of mortgages and securitized credit versus corporate credit. We believe mortgage credit offers the best risk-return potential based on the current levels of credit spreads in most sectors.
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Why the Pivot?
Federal Reserve Chairman Powell surprised markets with a very dovish message at the December FOMC meeting. Our portfolio management team examines the change in messaging and explains what this could mean for markets and the broader economy.
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Reduce Cash and T-Bills: Ditching the 2022 Playbook
As investors begin to move back into the fixed-income market, Angel Oak believes high-quality ultrashort strategies can potentially provide strong total return profiles.
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Negative Convexity & Opportunities in the Mortgage Market
Angel Oak’s portfolio management team explains why agency mortgage securities trade wider than U.S. Treasuries though both have government backing.
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Lack of Supply on the Horizon
CIO Sam Dunlap and Chief Portfolio Strategist David Wells explain the tailwinds seen in the mortgage securities market as a result of the current rate-hiking cycle.
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Lower Inflation on the Horizon
Sam Dunlap and David Wells share why they believe that the Fed is at or near peak policy and interest rate cuts could be on the horizon.
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The Stable Fundamentals in Housing
Sam Dunlap and David Wells share why they believe the lack of agency and non-agency MBS supply in a shrinking market with historically wide spreads, stable fundamentals, and expectations for declining rates and volatility present a favorable technical backdrop for potential spread tightening moving forward.
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2023 Mid-Year Outlook
We continue to favor high-quality areas of securitized credit, which have been vulnerable to the increased interest rate volatility and widening in agency MBS spreads in the first half of the year. While most areas of securitized credit are historically cheap to corporate credit and may be more reflective of the significant recession in the second half of 2023, we remain selective and focused on high-quality areas with stable credit fundamentals, including agency and non-agency MBS and senior short-duration consumer asset-backed securities.
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Interest Rate Risk May Be A Thing of the Past
Angel Oak’s investment team explains why investors should switch their focus from interest rate risk to reinvestment risk as the team believes the Federal Reserve is nearing peak policy.
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The Securitized Credit Premium
Ward Bortz and David Wells explore securitized credit’s underrepresentation within retail investors’ fixed income portfolios and explain possible drivers of the securitized credit premium.
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