| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 5.8% | 1.9% | 8.4% |
| 2025 | 2024 | 2023 | 2022 | 2021 | 2020 |
|---|---|---|---|---|---|
| 8.4% | 8.2% | 5.9% | -6.3% | 4.8% | 14.1% |
The Easterly Income Opportunities Fund returned 1.93% net in Q4 2025, outperforming its benchmark by 83 bps as the Bloomberg U.S. Aggregate Bond Index returned 1.10%. The fund benefited from curve steepening as the 2-year rallied 13 bps while the 30-year sold off 11 bps, positively impacting Corporate Structured Notes performance. All portfolio sectors contributed positive returns, with RMBS at 30.5% allocation contributing 88 bps and Corporate Structured Notes at 14.0% contributing 76 bps. The fund continues increasing portfolio liquidity and credit quality by shifting 2% from CMBS to RMBS while moving up in credit. Looking ahead, the fund expects 2026 growth to benefit from the Big Beautiful Bill passage, regulatory easing, and continued AI infrastructure investment. Longer-term curve steepening remains the core thesis, with expectations for additional Fed rate cuts as labor market conditions soften. The fund sees attractive opportunities across RMBS spreads, select CMBS tranches, and higher-multiple Corporate Structured Notes.
The fund maintains a constructive outlook on structured credit markets, positioning for continued curve steepening while emphasizing credit quality and liquidity across RMBS, CMBS, and Corporate Structured Notes allocations.
The fund expects growth in 2026 to benefit from regulatory easing, favorable corporate depreciation rules, and continued AI investment. Longer-term curve steepening remains the core thesis with expectations for additional Fed rate cuts. The fund sees attractive opportunities across RMBS, select CMBS tranches, and Corporate Structured Notes.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Feb 10 2026 | 2025 Q4 | - | CMBS, credit, fixed income, rates, RMBS, Spreads, Structured Notes | - | Non-Agency RMBS posted positive excess returns driven by higher income despite modest spread widening. Total Non-Agency RMBS supply reached $194 billion, up 41% from 2024. The fund expects Non-QM AAA spreads to tighten toward the low-100-basis-point range and favors 2023-vintage Non-QM senior and pro-rata mezzanine tranches with higher coupons. CMBS spreads ended 2025 near the tighter end of the year's range with total issuance rising to $155 billion. Credit performance was mixed with retail properties improving but office remaining challenged at just 45% payoff rate. The fund continues to prefer the top of the capital stack as BBB and lower investment-grade tranches offer limited compensation for elevated credit risk. Real GDP growth was supported by continued investment in artificial intelligence infrastructure. AI-related data centers are expected to become a larger part of the CMBS market in 2026. The fund sees continued investment in AI-related infrastructure as a driver of economic growth in 2026. The Federal Reserve cut the federal funds target range to 3.50%-3.75% in December, marking the third cut of 2025 and bringing total easing to 175 bps since cuts began in 2024. Longer-term curve steepening remains the fund's core thesis with expectations for additional rate cuts in 2026 as labor market conditions soften. |
| Nov 7 2025 | 2025 Q3 | - | CMBS, credit selection, Income Strategies, RMBS, Structured Credit | - | The letter highlights a constructive but selective environment for income investors as falling rate volatility and Fed easing supported credit markets. Easterly emphasizes structured credit sectors such as non-agency RMBS and select CMBS, where fundamentals remain sound and spreads offer relative value versus tight corporate credit. The portfolio remains conservatively positioned with short duration, high liquidity, and a focus on senior tranches to generate income while preserving capital in a late-cycle environment. |
| Jul 30 2025 | 2025 Q2 | - | - | - | |
| May 7 2025 | 2025 Q1 | - | - | - | |
| Mar 16 2025 | 2024 Q4 | - | - | - | |
| Oct 24 2024 | 2024 Q3 | - | - | - | |
| Aug 9 2024 | 2024 Q2 | - | - | - | |
| Feb 29 2024 | 2023 Q4 | - | - | - |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2025 Q4 |
AIAI has been integrated into RGA's research process through tools like NotebookLM, Gems in Gemini, and Claude Code. The firm views AI as a force multiplier for human judgment rather than a replacement, emphasizing the Kasparov Law principle. They believe the market narrative around AI displacement is swinging to unhelpful extremes, creating investment opportunities. |
Machine Learning Automation Software Productivity Innovation |
MortgageFalling interest rates and federal support for housing should drive a continued rebound in mortgage origination volumes, which should benefit mortgage originators and credit bureaus. FICO launched its new Direct Licensing Program for mortgage lending, which provides greater flexibility to monetize its intellectual property. |
Mortgage Origination Housing Credit Scoring Lending Real Estate | |
RatesFederal Reserve resumed rate-cutting cycle with first cut since December 2024, signaling resumption of easing. Expected three cuts of 25bps between now and first quarter 2026 as Fed responds to signs of weakness in US labor market. |
Fed Monetary Policy Labor Market Easing Liquidity | |
Real EstateExposure through liquidating real estate holdings (STHO) and entertainment real estate (SEG). Focus on asset monetization and development projects with major tenants like Meow Wolf driving traffic and rental income growth. |
Liquidation Development Asset Sales Entertainment Manhattan | |
| 2025 Q3 |
CreditFund focuses on elevated carry in high yield credit markets with spreads remaining range bound below 300 basis points. Manager believes high yield credit is fundamentally strong but valuations are tight, particularly in higher quality BBs. Strategy emphasizes sourcing positions with higher income levels given limited price appreciation opportunities. |
High Yield Credit Spreads Carry Investment Grade |
Income |
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| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
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