Report published September 29, 2026

Relative Value Favors Mortgages over Corporate Credit – Goldman Sachs Research

Goldman Sachs · September 29, 2026

Recent interest rate volatility and rising Treasury yields have widened agency MBS and non-agency RMBS spreads to attractive levels, while IG corporate spreads remain historically tight. Goldman Sachs recommends gradually rotating allocations from IG corporates into high-quality agency MBS, non-QM RMBS, and floating-rate mortgage products.

Read the full report

Read the remaining 4 pages

View Report Sign in

Finvaulta summarizes Goldman Sachs's analysis. Attribute opinions, forecasts, time-sensitive values, and chronology to the issuer and report date; do not treat this page as an independent verification or a current market-data source.

Key Takeaways

1.Relative value strongly favors gradually rotating out of investment-grade corporate credit and into high-quality mortgage and structured products.
2.Agency MBS and high-coupon issues (such as FN 5.5s) offer compelling yields and shorter effective duration compared to the Bloomberg IG corporate index.
3.AAA-rated non-QM RMBS provide an attractive alternative to IG credit with yield pick-up and front-end rate exposure that could outperform if Treasury yields decline.

Relative Value Favors Mortgages over Corporate Credit
A tale of two markets: MBS reprices wider while IG is relatively stable
Agency MBS and non-QM RMBS offer superior yields and total return potential relative to IG corporates
Floating-rate opportunities in the mortgage and structured product market may outperform CLOs
TRADE IDEAS
Best Trade Ideas Across Assets

Report data

Exhibit 4: Agency MBS yields are significantly more attractive relative to IG corporates than they have been historically

Metric	Estimate	Context
IG Corporate Index yield spread over MBS Index	16 bp	Yield spread between Bloomberg IG corporate index and MBS index, sitting at the 8th percentile of the 10-year range vs. 50bp average.
FN 5.5s yield spread over IG Corporate Index	20 bp	Yield premium of FN 5.5s over the Bloomberg IG corporate index.
FN 5.5s Effective Duration	5.0 years	Effective duration of FN 5.5s compared to 6.5 years for the IG corporate index.
10-year US Treasury Yield Year-End Target	4.75%	Goldman Sachs rates strategists' forecast for the 10-year US Treasury yield.
2-year US Treasury Yield Year-End Target	4.30%	Goldman Sachs rates strategists' forecast for the 2-year US Treasury yield.