Macroeconomic data and high frequency asset-backed securities (ABS) data analyzed in September 2024 by DoubleLine Portfolio Manager Andrew Hsu and ABS Trader Michael Fine show a persistently resilient U.S. consumer. In “The State of the U.S. Consumer Through the Lens of Asset-Backed Securities,” Messrs. Hsu and Fine attribute the consumer’s resilience to “the strength of the residential mortgage market, a robust labor market and the excess savings accumulated during the pandemic.” Notwithstanding that strength, the authors note that “potential risks to the consumer persist, including the depletion of these savings, wage stagnation, a recent rise in unemployment and ongoing high consumer prices, notwithstanding cooling in the year-over-year rate of inflation.” Amid that conjuncture of consumer resilience and economic risk, DoubleLine, they write, continues “to find attractive relative value in select areas of the ABS consumer market. While prepayments, defaults and loss severities require close monitoring, they all remain within reasonable historical average moving bands.”
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.
