In an environment where there’s a lot of things changing: sentiment, fundamental performance, it is good to have that additional carry in your investments. And that’s something that ABS inherently has due to its floating rate and exposure to the front and not the long end of the curve.
ABS in 2024: Steady returns amidst a sea of volatility
When it comes to market volatility, 2024 has been quite the year. With geopolitical issues, the continued effects of inflation and high cost of living, and the hike in interest rates, few asset classes and investor expectations have been left unaffected.
In the ABS (Asset Backed Securities) sector, even when faced with an increased cost of living, the consumer has remained in good health. And in the face of market turmoil, its floating-rate structure left ABS significantly less impacted. Even more so, thanks to its pickup compared to traditional fixed income, ABS has been able to provide stable returns in a volatile environment.
