Oil and income: Will MBS be winners this year?

The falling oil price is having myriad impact on a range of assets, and mortgage-backed securities could be the main beneficiaries this year, explains BlackRock's Michael Fredericks.

Until last summer, the price of oil had been high for years. Even in the face of macroeconomic and geopolitical uncertainties, Brent crude peaked at $115 a barrel. But now, amid a global supply glut, the price of oil is around 50% lower. While motorists and consumers will no doubt have cheered as oil slumped, its continued decline adds to the difficulties faced by income investors. There has been significant stress in the high yield space, where 15% of the bonds in issuance are energy-related. Taking a purely broad brush to investing in this space has cost investors over the past few mon...