Glyndon Park
Value, special situations, contrarian

American Capital Agency's Brilliant Portfolio Management

American Capital Agency (NASDAQ:AGNC) is a mortgage real estate investment trust (mREIT) that invests in agency-issued mortgage-backed securities using significant leverage. The result is a high-income portfolio that returns substantial dividends from investors profiting from the difference between mortgage interest income and the cost of funds. Well-managed mREITS are one of the best investment options for dividend and income-seeking investors. We've written previously on the quality of AGNC's MBS acumen.

In reporting its recent quarterly results, AGNC disclosed details behind its portfolio economics details its anticipated margins. (see slide below)

In evaluating the opportunity for entering into a leveraged investment, investors will evaluate the return on equity (ROE) for that investment. For mREITs, they will look at the...

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