Key takeaways:
- High-quality securitised assets offer a compelling cash-plus solution, combining strong credit quality and stable cashflows with low exposure to interest rate volatility.
- For charities holding significant cash, reallocating a portion into securitised could meaningfully enhance income potential and diversification while retaining capital stability and liquidity.
- Active management is critical for investing in securitised. It requires deep analysis of collateral, structures and cashflows. Experienced managers may help to identify relative value, mitigate risks, and deliver consistent excess returns over cash through varied market conditions.
For charities and endowments seeking to balance spending needs with capital preservation and to grow assets in line with inflation, high-quality high-quality securitised assets offers a compelling alternative to cash. With low interest rate sensitivity, reliable liquidity and strong structural protections, securitised offers a cash-plus return profile without materially increasing risk. Its strong credit quality and low exposure to interest rate volatility provides stable cashflows across different market environments.
At the same time, the transparent and actively-traded securitised market allows organisations to raise or deploy capital efficiently as funding priorities evolve. By providing exposure to real economy and consumer collateral, securitised can enhance diversification and help moderate overall portfolio volatility. Together, these characteristics position securitised as a flexible and resilient tool for long-term stewards of charitable capital.
These are the views of the author at the time of publication and may differ from the views of other individuals/teams at Janus Henderson Investors. References made to individual securities do not constitute a recommendation to buy, sell or hold any security, investment strategy or market sector, and should not be assumed to be profitable. Janus Henderson Investors, its affiliated advisor, or its employees, may have a position in the securities mentioned.
Past performance does not predict future returns. The value of an investment and the income from it can fall as well as rise and you may not get back the amount originally invested.
The information in this article does not qualify as an investment recommendation.
There is no guarantee that past trends will continue, or forecasts will be realised.
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