WEBVTT

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Today's fixed income landscape continues
to favor securitized products—especially

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senior tranches—as spreads offer
the potential for strong relative value

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along with attractive
risk-adjusted returns.

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Let's take a look across the sectors.

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In asset-backed securities, prime
consumer credit is holding up,

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but inflation is pressuring weaker
borrowers.

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Our team is also starting
to see some cracks amongst borrowers

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of all credit grades that have student
loans as the payment moratorium has ended.

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Thus, we strongly favor
top-tier issuers or originators.

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In commercial ABS, we continue to focus on

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contractual cash flows
that are essential to companies

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or that are less sensitive
to economic downturns.

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In commercial mortgage-backed securities,
property values are stabilizing.

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We see some very specific value
in single-asset, single-borrower deals

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that have strong

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structural protections across
investment-grade and high-yield tranches.

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We also see good relative value
in five-year conduit AAA bonds.

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CLOs remain attractive at different points
in the capital structure.

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While credit concerns continue
in the underlying loans,

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we remain selective in adding
mezzanine exposure

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and remain active in primary
and secondary markets across the U.S.

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and Europe.

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In residential mortgage-backed securities,

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tight housing supply supports prices
despite lower affordability.

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We are constructive on mortgage credit,
favoring second liens,

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non-qualified mortgage loans,
and some reperforming assets.

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Across the board,
our strategy is clear: (i) remain active

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in adjusting our risk positions
across sectors and tranches,

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(ii) relative value is generally in senior
bonds, with some small exceptions

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across high-yield tranches, and (iii)
given flat credit and term curves,

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we have a general focus on shorter
spread duration.

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We believe securitized products
remains a bright spot in fixed income—if

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you know where to look.