Advantus Launches High-Yield Mortgage Strategy For Institutional Investors

Advantus Capital Management says it is taking advantage of the downturn in the mortgage securities market to launch a high-yield mortgage investment strategy, and the firm has added a portfolio manager to oversee it.

‘The timing to enter this market is excellent, because spreads have widened substantially on residential and commercial mortgage securities rated AAA to BB-,’ states Chris Sebald, executive vice president and chief investment officer at Advantus. ‘Yield spreads on many mortgage securities are very wide, creating substantial value.’

Advantus has hired Dean Di Bias to manage the high-yield mortgage investment strategy. Most recently, Di Bias was with GMAC-RFC in Bloomington, Minn., where he was managing director and senior vice president of credit portfolio management.

Sebald says spreads on investment-grade securities offer significant compensation for potential credit risks. Additionally, the securitization markets have been so damaged by fallout from the housing downturn and its impact on mortgage and other debt securities that Advantus believes that premiums to invest in the sector will remain attractive for some time to come.

Source: Advantus Capital Management

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