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For institutional investors in Asia

A strong core: How Asset-Backed Securities can improve fixed income strength

Asset-backed securities (ABS) are a valuable, but often overlooked diversifier of fixed income portfolios. The Janus Henderson Portfolio Construction and Strategy (PCS) Team explore how ABS has performed through different market scenarios and the potential benefits of an allocation.

Matthew Bullock

Head of Portfolio Construction and Strategy, EMEA & APAC


Sabrina Denis

Senior Portfolio Strategist


Mario Aguilar De Irmay, CFA

Senior Portfolio Strategist


Jul 1, 2025
8 minute read

Key takeaways:

  • ABS are a very diverse and liquid market, offering real economic exposures, with underlying asset pools consisting of the likes of residential mortgages or car loans. However, they are often overlooked by investors in fixed income allocations.
  • Investing in ABS can provide access to high quality income, diversification and resilient returns through different market environments.
  • Including ABS in a fixed income portfolio has been shown to enhance returns and reduce risks over time.

ABS offer a relatively higher yield versus other similarly rated corporate bonds along with a relatively low-interest rate duration and shorter average spread duration (reducing the price sensitivity to interest rate and credit spread moves in the market). All of which makes ABS a helpful, yet relatively underutilised, diversifier to corporate bonds in fixed income portfolios. Despite their strong benefits and a global ABS opportunity set of more than US$800 billion1 , ABS are often overlooked as part of a diversified fixed income portfolio.
1 Source: Janus Henderson Investors, as at 31 March 2025, based on EU/UK regs compliant universe.

Janus Henderson Investors makes no representation as to whether any illustration/example mentioned in this document is now or was ever held in any portfolio. Illustrations shown are for the limited purpose of highlighting specific elements of the research process. The examples are not intended to be a recommendation to buy or sell a security, or an indication of the holdings of any portfolio or an indication of performance for the subject company.
Matthew Bullock

Head of Portfolio Construction and Strategy, EMEA & APAC


Sabrina Denis

Senior Portfolio Strategist


Mario Aguilar De Irmay, CFA

Senior Portfolio Strategist


Jul 1, 2025
8 minute read

Key takeaways:

  • ABS are a very diverse and liquid market, offering real economic exposures, with underlying asset pools consisting of the likes of residential mortgages or car loans. However, they are often overlooked by investors in fixed income allocations.
  • Investing in ABS can provide access to high quality income, diversification and resilient returns through different market environments.
  • Including ABS in a fixed income portfolio has been shown to enhance returns and reduce risks over time.