Agency MBS Valuations are Historically Cheap

Why Consider Agency MBS in Today's Market

1. Attractive Valuations: Current valuations are compelling, with spreads and yields near their most attractive levels in over a decade, providing the potential for strong risk-adjusted returns and limited prepayment risk
2. Improving Demand: With demand from banks, asset managers, and GSEs on the rise and new issuance remaining subdued, the supply-demand balance for Agency MBS is increasingly favorable, positioning the asset class for strong forward performance as more buyers are likely to step in and support valuations
3. Low Prepayment Risk: Agency MBS tend to offer higher yields than U.S. Treasuries because they carry prepayment risk. However, that risk is minimal today since most outstanding mortgages have rates well below today's mortgage rates, making early refinancing unlikely

PMBS Stands Out Against the Crowd

1. Category Leader in Mortgage Investing: PMBS is the #1 ranked Government Mortgage-Backed Bond Fund over the trailing 3- and 10-year periods, underscoring its long-term consistency and leadership in mortgage investing
2. Access to PIMCO's Mortgage Investing Edge: With nearly 40 years of mortgage investing and over $150 billion in Agency MBS exposure firmwide, PMBS benefits from PIMCO’s scale, deep resources, and proven investment process
3. Time-tested Active Management: PMBS dynamically invests across the Agency MBS market to capture relative value opportunities, optimize yields, mitigate downside risk, and maximize return potential

Please note this article is for information purposes only and does not in any way constitute investment advice. It is essential that you seek advice from a registered financial professional prior to making any investment decision.