Episode 399: Agency MBS: Generating Alpha without Credit Risk

Agency mortgage-backed securities can offer highly liquid exposure with credit characteristics comparable to U.S. Treasuries, but the asset class carries its own set of risks and opportunities. Tyler Patla, Senior Vice President, Managing Director of Core Fixed Income and Director of Agency Mortgages at Pioneer Investments, a Victory Capital Management franchise, discusses prepayment behavior, convexity, liquidity, portfolio construction, and how investors are compensated for taking mortgage-specific risk. The conversation also explores why Tyler views agency MBS as a security selection asset class, how borrower characteristics can influence prepayment behavior, and where active management may create alpha. He also shares how machine learning and AI are expanding mortgage analysis and could reshape both security selection and the mortgage origination process over time.