ABS delivers performance through volatile market environments: what next?

Jul 11, 2025

The year-to-date has been another lesson for investors in navigating volatility, with uncertainties around the paths of growth and inflation set to continue. Our Securitised Credit team looks at how asset-backed securities (ABS) provide certainty in an uncertain world.

In our full piece, we discuss:

  • Our views from the start of 2025: as set out in Positioning portfolios for 2025: ABS is a solution in volatile and benign markets, we discussed in January how ABS could provide an attractive solution for investors in two scenarios for the year ahead: both benign and volatile environments.
  • Securitised credit again proved its resilience: our strategies have delivered attractive performance and minimised drawdowns through this year’s tariff-led volatility. This is through attractive asset class characteristics and active portfolio management to reduce risk in advance of volatility and capture attractive total returns when weakness persists.
  • The benefits of ABS during uncertainty: we believe the most integral benefits of the asset class at this time are the credit benefits; with high levels of protection from idiosyncratic defaults and the natural deleveraging benefits of the asset class which results in a high level of upgrades. As well as these benefits, investors are also compensated with wider spreads.