The Consumer plays a vital role in the U.S. Economy, and the growing level of Household Debt provides abundant collateral for securitization via the ABS market. The yields available are at decade highs and ABS deals are designed to withstand losses well exceeding those experienced during the Global Financial Crisis. Moving forward, despite the potential deterioration of consumer fundamentals, we anticipate strong performance of ABS across various scenarios.
In the event of a pause in the Federal Reserve’s monetary policy, ABS investors can still benefit from the current environment where a historically inverted yield curve results in consumer ABS offering the highest yield per unit of duration. If the Fed chooses to raise rates, the short-term, monthly amortizing nature of ABS investments, enables investors to reinvest cashflows into a higher-rate environment.
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.