The US agency mortgage-backed Securities (MBS) market is the world’s second largest bond market after the US Treasuries market1, making it one of the most liquid markets globally.
97% of the agency MBS positions held by the fund (e.g. in securities issued by US institutions such as Ginnie Mae, Freddie Mac and Fannie Mae) are rated AAA2 and have a US government guarantee. So agency MBS have the same top-level credit rating as a US Treasury security. Therefore, even in low risk periods, agency MBS are expected to outperform investment grade credit and other riskier bonds.
Why this fund?
The team managing BNP Paribas Flexi I US Mortgage has a sharp focus on security selection. They spend most of their time looking for bonds with attractive characteristics that should produce a high risk-adjusted return. The lead portfolio manager John Carey has been managing this strategy at the firm since 1998 and has been awarded for his performance many times. The fund also recently received 5 stars from Morningstar3.
Key strengths of BNP Paribas Flexi I US Mortgage
- Awarded a 5-star all rating by Morningstar3
- Strong returns from high-quality bonds with low correlations to the returns of traditional asset classes
- Focus on opportunities in AAA-rated US agency MBS
- A very experienced and stable portfolio management team
- 1. Source: Bloomberg, Barclays, March 2018
- 2. Source: Using Bloomberg Barclays Index methodology (rating agencies: Moody’s, Fitch, S&P), March 2018
- 3. Source: Morningstar, March 2018
Past performance is not indicate of current or future performance
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** “BNP Paribas Asset Management” is the global brand name of the BNP Paribas group’s asset management services. The individual asset management entities within BNP Paribas Asset Management if specified herein, are specified for information only and do not necessarily carry on business in your jurisdiction. For further information, please contact your locally licensed Investment Partner.