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European Asset Backed Securities

A mature and attractive asset class

Asset-backed securities (ABS) represent securities backed by specific collateral, with the largest sector being residential mortgages (RMBS). Contrary to their reputation, default rates on European ABS during the financial crisis were significantly lower than on similarly rated corporate bonds.  

Introduction to ABS

In this video, Egbert Bronsema – Senior Investment Manager in the Alternative Fixed Income team, provides an overview of the ABS asset class and the Aegon AM experience in managing ABS portfolios. Egbert discusses the opportunity set European ABS offers investors and how it fits into portfolios, highlighting the asset class floating rate nature, low correlations with traditional asset classes and low interest rate sensitivity. He also explains why European ABS yields are higher compared to similarly rated instrument while liquidity for the asset class is comparable to corporate investment grade credit.

European ABS Outlook

In this video Egbert Bronsema, Senior Investment Manager in the Alternative Fixed Income team at Aegon AM, discusses the market volatility we have seen in recent years as inflation crept up, central banks increased interest rates at an unprecedented pace, geopolitical risks surfaced, and several wars all fed into market sentiment. With the uncertain outlook for the European economy and the way central banks will act, Egbert explains why high-carry products with low interest rate sensitivity are set to outperform.

How our clients are incorporating ABS into their asset allocation

         

Attractive risk/return characteristics

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Low sensitivity to interest rates

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Exposure to a range of consumer-backed opportunities

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Diversification

 

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A transparent view of collateral quality 

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Seeking alternative investments
Effective diversification
Transparency of collateral