"We eat returns, not OAS or yields." A client said that to me in the early 1990s. My research since has focused entirely on understanding and maximizing total returns.

Total returns consist of two components: income and price change.

MBS Mantra and ARAM offer research driven strategies that target each — and in combination. We convert our proprietary research into client-serving portfolios.

Strategies

ARAM and MBS Mantra provide investment solutions for family offices, trusts, foundations, endowments, and other institutions. Our strategies are low-beta, high-alpha, and use no leverage. What follows is unlike anything else in finance.

MBS High Income / Absolute Return

MBS are variable income securities — miscategorized by markets as fixed income simply because they are bonds. Our flagship strategy exploits this mischaracterzation directly, using proprietary processes to target high income returns in MBS and structured products and compounding portfolio cashflows at high rates. The result is alpha without credit leverage: portfolios composed primarily of senior bonds, no margin, no borrowing, no subordinated structures. Returns are more stable than those of individual bonds, with a high historical Sharpe ratio. This strategy has been developed and in use for over 25 years. We currently offer access through separate accounts and are seeking investors for a fund.

ARAM Systematic Active Portfolios of ETFs

ARAM combines decades of macro-economic research, financial theory, and systematic data science to construct actively managed ETF portfolios. ETFs provide the liquidity infrastructure for top-down active allocation across the full opportunity set of global asset classes. Our proprietary eCIO (Electronic Chief Investment Officer) process operates in two integrated layers. The first predicts portfolio risk dynamically from approximately 75 macroeconomic variables each month, replacing backward-looking volatility with a forward-looking macro risk target. The second models expected returns for each ETF using sector-adaptive macro regression, identifying which asset classes are positioned to outperform given current economic conditions. A regime detection layer monitors central bank balance sheet dynamics to classify the global liquidity environment and adjust portfolio positioning accordingly. Together these layers determine both what to own and how much risk to take — every month, fully systematically, with every decision traceable to specific macroeconomic inputs. No leverage. No discretionary overrides. The result is a return and risk profile that adapts to the macro environment rather than reacting to it after the fact. These strategies are currently deployed as model portfolios and are attracting clients.

Distressed Fixed Income and MBS

This strategy is on standby, ready to deploy in the event of a market deleveraging. We have been researching, trading, and investing in distressed MBS for over 30 years — through the RTC crisis, LTCM, the dot-com collapse, and the Great Financial Crisis of 2007. In each case we generated strong returns for ourselves and our clients. Unlike the High Income strategy, distressed portfolios invest in subordinated and credit-levered bonds across MBS, CMBS, and ABS in addition to traditional high-income MBS. We have believed since MBS Mantra's founding that MBS credit has been richly priced, with too much levered money chasing too little spread. When the next dislocation comes, we will be ready.

Philosophy and Process

The foreword to a National Geographic publication on 100 Scientific Discoveries That Changed the World offers much insight into our philosophy and process. In it, discussing the history of science, Timothy Ferris writes: "...big ideas came to be regarded as the providence of big thinkers. These intellectuals, as they were called, contributed valuable insights but seldom discovered or invented anything.... Pioneering scientists like Galileo, Gilbert, Harvey and Newton had little use for scholarly analysis of venerable opinions... They were more apt to agree with Francis Bacon, who likened his Cambridge professors to 'becalmed ships — they never move but by the wind of other men's breath.'... The scientists preferred to find new facts... their points of reference came less from reading old books than from experimentation and observation."

At MBS Mantra, we apply the same scientific process to finance and economics. We prefer to revalidate what is accepted and "known" rather than inherit it, and we conduct our own exhaustive analyses built from first principles. We do not blindly accept or apply theory — we let the facts and the data either validate theory or lead us toward new thinking. This process informs our understanding of Beta and allows us to identify Alpha, and we have been granted a trademark for our process: Alpha Through Analysis®.

We have long combined the study of money supply with bond valuation, with much success, and have over the years identified many sources of Alpha in the MBS markets. Many of our historical analyses, going back to 1988, are available on this website. There are numerous examples where markets have taken years — sometimes decades — to arrive at what we had already discovered. Our ARAM portfolios will similarly take time to be discovered.