Securitised debt is one of the key components of the fixed income market. But the subprime mortgage crisis, which started in 2007 and triggered the Global Financial Crisis, eroded investors’ confidence in this fixed income sector.
A decade on, the securitisation market has regained much ground. We see opportunities and are using our expertise to harvest yield opportunities and manage risk.
Investments involve risk. Not all investments are suitable for all investors. Investors should seek professional advice, evaluate based on their investment objectives and risk appetite and read offering documents before investing. Investments are not similar to or comparable with fixed deposits. Diversification does not guarantee positive returns or eliminate risk of loss.
An unconstrained strategy invests opportunistically across sectors and geographies in the fixed income universe, allowing investors to go beyond traditional bonds in their search for yield based on their investment objectives and risk appetite. For example:
Overall, it is worthwhile for investors to be mindful of the risks before investing in the securitised debt market. Nonetheless, investment risks could be managed through diversification5 with the help of an active manager.
1. Source: “The rebirth of securitisation: Where is the private label mortgage market?”, Urban Institute, September 2015.
2. Source: FactSet, FRB, J.P. Morgan Asset Management, Bureau of Economic Analysis. Data include households and non-profit organisations. First quarter 2019 figures for debt service ratio is J.P. Morgan Asset Management estimates. Past performance is not a reliable indicator of current and future results. Data reflect most recently available as of 31.03.2019.
3. Source: US Securities and Exchange Commission (http://www.sec.gov/spotlight/dodd-frank/assetbackedsecurities.shtml).
4. For illustrative purposes only, exact allocation of portfolio depends on each individual’s circumstances and market conditions.
5. Diversification does not guarantee investment return and does not eliminate the risk of loss.
Investment involves risk. Not all investments are suitable for all investors. Investors should consult professional advice before investing. Investments are not similar to or comparable with fixed deposits. It does not constitute investment advice and it should not be treated as an offer to sell or a solicitation of an offer to buy any fund, security, investment product or service. The information contained herein does not constitute J.P. Morgan research and should not be treated as such. The material was prepared without regard to specific objectives, financial situation or needs of any particular receiver. The opinions and views expressed here are as of the date of this publication, which are subject to change and are not to be construed as investment advice. Estimates, assumptions and projections are provided for information only and may or may not come to pass. This advertisement or publication has not been reviewed by the Monetary Authority of Singapore. Issued by JPMorgan Asset Management (Singapore) Limited (Co. Reg. No. 197601586K). All rights reserved.
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