Investors have kept away from mortgage-backed securities since the collapse of the US sub-prime property market two years ago. But some observers believe they may be coming back into favour as investors spot opportunities created by the asset insurance programmes being used to bail out banks on both sides of the Atlantic.

Finance houses looking to capitalise on investors' reluctance to jump straight back into equities and corporate bonds are looking at relatively cheap structured credit that remains on the market, and asset managers and smaller investment banks are reaping the benefits of the job cuts on Wall Street. They are responding to customer demand by bringing in staff to populate structured product departments and emphasising mortgage-backed assets.