High interest rates have been a boon to Americans holding cash, but many on Wall Street are cautioning investors to start thinking ahead. People have been piling into cash vehicles like money market funds and certificates of deposit since the Federal Reserve started hiking interest rates. In fact, total money market fund assets hit a record $6.12 trillion for the week ended Wednesday, according to the Investment Company Institute .
are debt obligations created out of a pool of mortgages, and their cash flows are tied to the interest and payments on those loans. Agency MBS are backed by the government and issued by agencies Fannie Mae, Freddie Mac and Ginnie Mae. Wells Fargo also thinks it's time to start moving money out of cash by dollar cost averaging — or adding exposure over time — into some longer duration assets, said Luis Alvarado, global fixed income strategist at Wells Fargo Investment Institute.
, to favorable from neutral and downgraded Treasurys to neutral from favorable. Investors can gain exposure to MBS through exchange-traded funds. Alvarado specifically likes high quality within , including agency and non-agency mortgages. While supply is expected to remain flat, he expects demand to grow from banks as their loan growth decreases. "We believe mortgages are going to be a great recipient of flows because they still provide you with high credit quality, plenty of liquidity and a relative advantage to IG corporates, especially on spread differentials," he said. UBS also likes agency mortgage-backed securities right now.
Loans Loans Latest News, Loans Loans Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Source: latimes - 🏆 11. / 82 Read more »