CMO Market Update

August 19, 2019



Treasury yields declined again last week, leaving CMO spreads 2 basis points wider. As shown in the Spread Snapshot from the overall commentary, CMO spreads are roughly 30 basis points wider YTD. Among sectors for which we monitor and record spreads, no other product has seen widening to this extent in 2019, suggesting CMOs present improved relative value.



Those interested in deeper analytics for CMOs and other product types should consider our Investment Alternatives Matrix, published weekly.


Here you can gain a general idea of what is available in the market place and find metrics beyond yields and nominal spreads. Next to the Security Description in the first column is a breakdown of Weighted Average Lives in -200, Base Case, and +200 scenarios. This can assist investors in assessing extension or contraction risk. 12- and 36-month Total Returns are available as well.





Travis Nauert, CFA

Analyst, Investment Strategies

Vining Sparks IBG, LP

INTENDED FOR INSTITUTIONAL INVESTORS ONLY.
The information included herein has been obtained from sources deemed reliable, but it is not in any way guaranteed, and it, together with any opinions expressed, is subject to change at any time. Any and all details offered in this publication are preliminary and are therefore subject to change at any time. This has been prepared for general information purposes only and does not consider the specific investment objectives, financial situation and particular needs of any individual or institution. This information is, by its very nature, incomplete and specifically lacks information critical to making final investment decisions. Investors should seek financial advice as to the appropriateness of investing in any securities or investment strategies mentioned or recommended. The accuracy of the financial projections is dependent on the occurrence of future events which cannot be assured; therefore, the actual results achieved during the projection period may vary from the projections. The firm may have positions, long or short, in any or all securities mentioned. Member FINRA/SIPC.
Copyright © 2021
Member FINRA/SIPC
This is a publication of Vining-Sparks IBG, L.P.
775 Ridge Lake Blvd., Memphis, TN 38120