Why I'm Long Helios Total Return Fund

Nov.12.09 | About: Brookfield Total (HTR)

I opened a new position yesterday: long Helios Total Return Fund (NYSE:HTR).

This is a somewhat risky fund because more than 50% of it is invested in various mortgage backed securities. On the other hand, it pays more than 11% dividend, with monthly payments.

Over the last several days, HTR's price was going down, while the Net Asset Value (NAV) of the fund was going up a little bit. Currently the fund is valued at about a 9% discount.

My bet is that mortgage backed securities are currently undervalued and HTR is undervalued against the underlying assets. The high dividend doesn't hurt either.