Dawn Fitzpatrick, chief investment officer of Soros Fund Management, says agency mortgage-backed securities present a uniquely interesting investing opportunity.
“Two-thirds of your current holders—it’s central banks and banks—have turned into sellers,” she said Wednesday at the Bloomberg Invest conference in New York. “The valuations in that space have gotten disproportionately cheap relative to other asset classes.”
On Tuesday, Pacific Investment Management Co. CIO Dan Ivascyn said that agency mortgage-backed securities are the “most attractive asset.”
Recent U.S. regional bank failures that result in regulators auctioning off sizable portfolios are “also adding to the technical backdrop,” Fitzpatrick said. She expects to see more bank failures, adding that small banks are particularly vulnerable.
—With assistance from Erik Schatzker.
This article was provided by Bloomberg News.