In focus - Thought Leadership

An introduction to securitisation: a diverse opportunity set offering attractive excess return potential

Securitisation can be seen as highly technical, niche and (post-2008) perceived as risky, but its highly diverse range of opportunities can bring significant benefits to a portfolio.


Michelle Russell-Dowe

Michelle Russell-Dowe

Head of Securitized, US Fixed Income

The global securitised credit investment universe is large and diverse, but also often considered to be a technical space composed of a variety of sub-sectors and acronyms. This may be partially true, but secured fixed income represents a substantial opportunity set, offering investors the potential for excess return generation and portfolio diversification.

A new paper by Michelle Russell-Dowe, Schroders’ Head of Securitized Credit, explains the various types of securitisation and illuminates the range of sub-strategies. The paper explores their key characteristics and drivers and why this substantial part of the fixed income market can play such an important role within client portfolios.

Importantly, the paper also surveys the regulatory backdrop and how substantial policy implemented post-2008 has benefited the sector, challenging the post-crisis perception of the asset class as risky.

At a time when many investors are re-evaluating their fixed income portfolios, it is important to understand why this asset class now has a structural role within client allocations.