Central banks are still working to reflate asset prices while investors chase yield. This means ABS are prime candidates for top performance this year, says Jim Caron, portfolio manager at Morgan Stanley Investment Management.
Two themes dominated investment returns since the start of the financial crisis. Firstly, the reflation of asset prices directed by central bank policies, and secondly, assets with the highest real yields have tended to perform best. These themes are likely to dominate once again in 2015. Securitised products, such as commercial mortgage backed securities (CMBS) and residential mortgage backed securities (RMBS) best fit into these themes, especially in Europe. They are attractively priced, benefit from policy action from the European Central Bank (ECB) and potentially can produce high...
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