Spotlight on RMBS - May 2023

Residential Mortgage Backed Securities (‘RMBS’) are by far the largest, and most liquid component of the European ABS market, and a key tool for banks and other lenders to finance the loans they make to homeowners in the real economy. Whilst we believe that we will see a weakening of fundamental performance due to the current economic backdrop, the way RMBS is structured means that they are designed to withstand very tough conditions, as can be seen by the fact that default rates throughout the global financial crisis were amongst the lowest within fixed income. 

Doug Charleston & Rob Ford (both Partner / Portfolio Manager) hosted a ‘Spotlight on RMBS’ webinar, which gave a deep dive of the sector by briefly recapping how the typical RMBS structure works, looking at mortgage affordability and the cost of living implications and finally an overview of the RMBS market today.

The update was followed by a Q&A session.