DoubleLine Takes a Look at Agency MBS Market Heading Into 2025
DoubleLine has released a new research paper analyzing the Agency mortgage-backed securities (MBS) market outlook for 2025. Portfolio Manager Kunal Patel, CFA, and Analyst Alex Shvartser authored the report titled 'Agency Mortgage-Backed Securities: Thoughts From the Trading Desk,' expressing cautious optimism about Agency MBS performance.
The authors note that Agency MBS are currently priced at attractive levels across various potential economic scenarios. The research paper provides a comprehensive review of the asset class's past performance and explores future performance possibilities under different economic conditions.
DoubleLine ha pubblicato un nuovo documento di ricerca che analizza le prospettive del mercato delle securitizzazioni ipotecarie dell'agenzia (MBS) per il 2025. Il Portfolio Manager Kunal Patel, CFA, e l'Analista Alex Shvartser sono gli autori del rapporto intitolato 'Securitizzazioni Ipotecarie dell'Agenzia: Riflessioni dal Trading Desk,' esprimendo un ottimismo cauto riguardo alla performance delle MBS dell'agenzia.
Gli autori osservano che le MBS dell'agenzia sono attualmente quotate a livelli attraenti in vari scenari economici potenziali. Il documento di ricerca fornisce una visione complessiva della performance passata della classe di attivi ed esplora le possibilità di performance futura sotto diverse condizioni economiche.
DoubleLine ha publicado un nuevo documento de investigación que analiza las perspectivas del mercado de valores respaldados por hipotecas de agencias (MBS) para 2025. El Gerente de Cartera Kunal Patel, CFA, y el Analista Alex Shvartser son los autores del informe titulado 'Valores Respaldados por Hipotecas de Agencias: Reflexiones del Departamento de Negociación,' expresando un optimismo cauto con respecto al desempeño de las MBS de agencia.
Los autores señalan que las MBS de agencia están actualmente valoradas en niveles atractivos en varios escenarios económicos potenciales. El documento de investigación ofrece una revisión integral del rendimiento pasado de la clase de activos y explora las posibilidades de rendimiento futuro bajo diferentes condiciones económicas.
더블라인이 2025년 기관 모기지 담보 증권(MBS) 시장 전망을 분석한 새로운 연구 보고서를 발표했습니다. 포트폴리오 매니저 쿠날 파텔(CFA)과 애널리스트 알렉스 슈바르처가 '기관 모기지 담보 증권: 트레이딩 데스크에서의 생각'이라는 제목의 보고서를 저술하였으며, 기관 MBS 성과에 대한 조심스러운 낙관론을 표현했습니다.
저자들은 기관 MBS가 현재 다양한 잠재적 경제 시나리오에서 매력적인 수준으로 가격이 책정되고 있다고 언급합니다. 이 연구 보고서는 자산 클래스의 과거 성과를 종합적으로 검토하고 다양한 경제 조건에서의 미래 성과 가능성을 탐구합니다.
DoubleLine a publié un nouveau document de recherche analysant les perspectives du marché des titres adossés à des hypothèques de l'agence (MBS) pour 2025. Le Gestionnaire de portefeuille Kunal Patel, CFA, et l'Analyste Alex Shvartser sont les auteurs du rapport intitulé 'Titres adossés à des hypothèques de l'agence : Réflexions du bureau de trading,' exprimant un optimisme prudent concernant la performance des MBS d'agence.
Les auteurs notent que les MBS d'agence sont actuellement évaluées à des niveaux attractifs dans divers scénarios économiques potentiels. Le document de recherche fournit une revue complète de la performance passée de cette classe d'actifs et explore les possibilités de performance future dans différentes conditions économiques.
DoubleLine hat ein neues Forschungsdokument veröffentlicht, das den Ausblick auf den Markt für Hypotheken-gestützte Wertpapiere von Agenturen (MBS) für 2025 analysiert. Portfoliomanager Kunal Patel, CFA, und Analyst Alex Shvartser sind die Autoren des Berichts mit dem Titel 'Hypotheken-gestützte Wertpapiere von Agenturen: Gedanken vom Handelstisch,' in dem sie einen vorsichtigen Optimismus hinsichtlich der Leistung der Agentur-MBS ausdrücken.
Die Autoren bemerken, dass die Agentur-MBS derzeit in verschiedenen potenziellen wirtschaftlichen Szenarien zu attraktiven Preisen angeboten werden. Das Forschungsdokument bietet eine umfassende Überprüfung der vergangenen Leistung der Anlageklasse und untersucht die Möglichkeiten zukünftiger Leistungen unter verschiedenen wirtschaftlichen Bedingungen.
- Agency MBS are currently priced at attractive levels
- Favorable outlook for Agency MBS performance in 2025
- None.
Insights
The research note from DoubleLine on Agency MBS reveals key strategic positioning opportunities in the fixed income market. The "cautiously optimistic" stance on Agency MBS suggests potential value plays in 2025, particularly given current attractive pricing levels across multiple economic scenarios.
Agency MBS typically offer lower credit risk compared to non-agency securities due to implicit or explicit government backing. With the Federal Reserve's quantitative tightening program continuing to impact the MBS market through reduced balance sheet holdings, this creates potential opportunities for active managers to capitalize on market dislocations and relative value opportunities.
For investors, Agency MBS could provide an attractive risk-adjusted return profile in 2025, especially if interest rate volatility moderates. The sector tends to perform well in range-bound rate environments and can offer additional yield over Treasuries while maintaining high credit quality. The current pricing suggests a potential defensive play with upside optionality depending on rate movements and prepayment behavior.
Beyond the surface-level outlook, several technical factors warrant attention. The Agency MBS market's convexity profile - its sensitivity to interest rate changes - becomes particularly relevant given current market conditions. With rates at elevated levels, the negative convexity risk traditionally associated with MBS may be less pronounced, potentially offering better risk-adjusted returns.
Current mortgage rates have significantly reduced prepayment risk, as most existing mortgages are well below market rates. This "lock-in" effect creates more predictable cash flows, which could enhance the appeal of Agency MBS to institutional investors seeking stable income streams. However, investors should monitor potential shifts in Federal Reserve policy and their impact on MBS spreads.
The research paper, "Agency Mortgage-Backed Securities: Thoughts From the Trading Desk," can be accessed here: https://doubleline.com/wp-content/uploads/Agency-MBS-Thoughts-from-the-Desk_January-2025.pdf.
"As 2025 begins, there are reasons to be cautiously optimistic about Agency MBS performance," Messrs. Patel and Shvartser write. "Currently, Agency MBS are priced at attractive levels in many reasonable scenarios that could take place in the broader economy."
Kunal Patel, CFA, is a Portfolio Manager on DoubleLine's Structured Products team. Mr. Patel joined DoubleLine in 2016 as a Mortgage Trader specializing in Agency RMBS and was later promoted to Portfolio Manager in 2021. Prior to DoubleLine, he worked as a Managing Director responsible for CMO and specified pool trading at Cantor Fitzgerald. Prior to that, Mr. Patel worked as a CMO, ARMs and Specified Pool Trader and Deal Structurer at Morgan Stanley, BNP Paribas and RBS Greenwich Capital. He holds a B.A. in Economics from Cornell University. Mr. Patel is a CFA® charterholder.
Alex Shvartser is an Analyst on DoubleLine's Structured Products team. Mr. Shvartser joined DoubleLine in 2020 as an Analyst on the Agency RMBS team. Prior to DoubleLine, he was with TCW as a Senior Vice President, Investment Analytics. Prior to TCW, Mr. Shvartser was a Quantitative Analyst at ICE Canyon. Prior to ICE Canyon, he was Vice President at BlackRock in the Financial Modeling Group. Mr. Shvartser holds a B.S. in Electrical Engineering from the California Institute of Technology and an M.S. in Mathematics in Finance from
About DoubleLine
DoubleLine Capital is an investment adviser registered under the Investment Advisers Act of 1940. DoubleLine's offices can be reached by telephone at (813) 791-7333 or by email at info@doubleline.com. Media can reach DoubleLine by email at media@doubleline.com. DoubleLine® is a registered trademark of DoubleLine Capital LP.
©2025 DoubleLine Capital LP.
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