In a recent research paper, members of the DoubleLine asset-backed securities (ABS) team write that “(i)ncorporating ABS into a fixed income portfolio can add diversification and enhance the return-to-risk profile.” Along with an attractive yield profile, the authors note that among fixed income sectors, ABS exhibits one of the lowest correlations to the investment grade bond market as represented by the Bloomberg US Aggregate Bond Index. With this mix of yield and reduced correlation to the index, ABS has the “potential to enhance return and lower volatility” of diversified fixed-income portfolios. Authors of the paper are Andrew Hsu, head of DoubleLine’s ABS team and co-portfolio manager of the DoubleLine Asset-Backed Securities ETF (DABS); Fifi Wong, DABS co-portfolio manager; ABS specialist Stephen Diaz Ellinghaus; and ABS trader Michael Fine.
Mr. Hsu joined DoubleLine at its inception in 2009. He is a Portfolio Manager for the DoubleLine Total Return and ABS/Infrastructure Income strategies. Mr. Hsu is a permanent member of the Fixed Income Asset Allocation and Structured Products Committees. Prior to that, he was responsible for analysis and trading of structured products, where his focus included residential MBS and ABS transactions. Mr. Hsu’s responsibilities have also included structuring and negotiating terms on new-issue transactions and forming strategic partnerships with issuing entities in order to participate in key transactions. Prior to DoubleLine, he worked at TCW from 2002, where he focused on credit analysis for structured product securities and co-managed two structured product funds centered on debt and equity investments. During that time, Mr. Hsu was actively involved with portfolio management decisions and investment analysis, including reverse engineering complex CDO/CLO structures. He holds a BS in Finance from the University of Southern California and is a CFA® charterholder.
Ms. Wong joined DoubleLine in 2009. She is Portfolio Manager on the Global Infrastructure Investment and Asset-Backed Securities team. Prior to DoubleLine, Ms. Wong was an Assistant Vice President at TCW where she was a Structured Products Risk Analyst. She holds a B.S. in Mathematics/Economics from the University of California, Los Angeles.
