Expect a Few Bumps, but No Accidents, in Auto ABS

In this paper, the Liquidity Solutions team defines benefits of holding asset-backed securities (ABS) in fixed-income portfolios and focuses on the attractive fundamentals of automotive sector ABS in today’s markets.

Key takeaways

  • Asset-backed securities (ABS) may provide an attractive yield advantage and capital preservation through structural protection.
  • Consumer fundamentals are normalizing from record levels and remain supportive, and consumers’ priority of payments aligns with our preference for auto collateral. 
  • Our credit due diligence process is multi-level, with a comprehensive understanding and stress testing at the collateral, loan, and transaction levels.