Non-agency securities are backed by non-government guaranteed mortgage loans, meaning that detailed security selection is critical to manage credit risk.
Navigated appropriately, non-agency mortgages can provide a valuable and less correlated income stream to a broader portfolio.
The second half of 2018 holds a mix of threats and opportunities.
With continued higher volatility, ongoing geopolitical risks and trade tensions and rising interest rates, multi-asset income investors need to be able to seek out capital growth and sustainable income across a broad spread of asset classes and geographies.
Having a balanced approach that takes into account relative performance of asset classes across the risk-return spectrum, with the ability to be nimble and dynamic in making changes but with an unwavering focus on generating steady income, will serve multi-asset investors well in this rapidly changing environment.
Michael Schoenhaut is co-manager of the JPM Multi-Asset Income fund