John Hancock Investment Management has launched an actively managed fund that focuses on asset-backed securities, including residential and commercial mortgages, bank regulatory capital and collateralized loan obligations, the company said Wednesday.
The fund, named John Hancock CQS Asset Backed Securities Fund, is overseen by an affiliate, Manulife CQS Investment Management, a London-based multi-sector alternative credit specialist, the firm said in a statement today.
The ABS fund is the latest offering from a division of Manulife Wealth & Asset Management, which launched three alternative funds last year: John Hancock CQS Multi Asset Credit Fund, John Hancock Disciplined Value Global Long/Short Fund and John Hancock Manulife Private Credit Plus Fund.
The fund is arriving as ABS supply is expected to hit a record amount in 2025 as a result of favorable funding conditions for issuers and strong investor appetite for these securities as alternatives to stocks and corporate bonds.
"We see compelling opportunities for investors across ABS subsectors which have historically exhibited low correlation to broader equity and credit markets," Jason Walker, co-chief investment officer of Manulife CQS and portfolio manager of the fund, said in a statement today.
Last year, the asset-backed sector produced 6.0% in total return, representing its second-highest annual return since 2009, according to an ICE BofA index. By comparison, S&P 500 and investment-grade corporate bonds earned annual total gains of 25% and 2.8% respectively in 2024.
In a December research report, Barclays said it expects ABS issuance to reach US$336bn in 2025, surpassing last year's tally of US$308bn.