When one thinks of fixed income securities, corporate and government bonds most often spring to mind since these sectors dominate the fixed income market. Structured products (Asset Backed and Mortgage Backed Securities) can be an afterthought, overlooked perhaps due to their complexity and the stigma associated with their performance through the credit crisis of 2008.
Structured products have some unique and attractive characteristics which result in high quality, stable cashflows and a performance potential that can diversify a portfolio of corporate and government bonds. In this memo we will highlight some of the features of structured products, and contrast them with other sectors, corporate bonds in particular.
