For investors looking for high-quality income with the potential for significant total return, agency mortgage-backed securities (MBS) may be the answer.
Fitting MBS into your portfolio In fact, Atluri believes agency MBS are more attractive than investment-grade corporate right now.
In addition, agency mortgage-backed securities also trade defensively if the economic outlook were to worsen, he added.
About 25% of core bond fund holdings are in mortgage-backed securities, according to Morningstar.
"Mortgage-backed securities didn't do as well [as investment grade] last year," said Wei Li, BlackRock's global chief investment strategist.
Persons:
Fannie Mae, Freddie Mac, Ginnie Mae, Jason Smith, Neuberger Berman, Smith, Michael Kessler, Kessler, Pramod, Atluri, Morningstar, Wei Li, Albion's Kessler
Organizations:
Agency MBS, U.S ., MBS, Mortgage News, Albion Financial Group, Federal Reserve, Capital Group, Fund of America, BlackRock