Using mortgage-backed securities to access the US' bouyant property market

Asset markets have proved unpredictable and, in some cases, highly irrational since the start of this year. As multi-asset managers, we tread a fine line, writes multi-asset manager Justin Christofel at BlackRock.

On the one hand, we need to minimise volatility, but we also need to be careful not to endanger long-term income and capital returns by an over-zealous reduction in risk assets. Any response to the market environment needs to be in line with our longer-term views.   We had already reduced exposure to volatile assets prior to the start of the year, taking down our equity weighting and building our position in higher quality credit. We believe higher quality credit now holds more potential upside with less downside risk than much of the equity market. This has helped limit investor expo...