The US agency mortgage backed-securities market makes up more than a quarter of the Bloomberg US Aggregate Bond index. This market segment is entering a period of uncertainty due to ongoing volatility in the rates market and the prospect of the Federal Reserve reducing its allocation to agency mortgage-backed securities. Join Henry Song, portfolio manager for the Diamond Hill Core Bond and Short Duration Securitized Bond strategies, for a discussion about the recent historic shift in interest rates and the impact on the residential mortgage market and fixed income investing. Henry has been investing in this part of the market for nearly two decades and brings his insights to the conversation, sharing his experience during the volatility of both the financial crisis and the more recent pandemic-induced market upheaval.
The topics covered will be:
- The agency residential mortgage market and the risks and opportunities associated with it.
- An introduction to and discussion around collateralized mortgage obligations.
- How portfolio construction in the core bond space can deliver a compelling portfolio that differentiates from peers.
- How, with the most recent shift in interest rates, a core bond allocation is a vital part of any asset allocation.
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