MORT: Market Vectors Mortgage REIT Income ETF Instablogs

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Wednesday, June 19, 3:13 PM Markets start to fall in earnest as the reality of a tapering and then ending in QE sinks in - even as the chairman is at pains to prove it's anything but a tightening move. The DJIA (DIA -0.8%) is off 145 points as the 10-year Treasury yield soars 15 bps to 2.33%, its highest level in 2 years. Reversing sizable early gains is the mREIT sector (REM -2.3%) - a leveraged holder of the paper the Fed will no longer be buying - with American Capital (AGNC -2%), (MTGE -1.5%), Annaly (NLY -2.2%), Invesco (IVR -2.5%), Two Harbors (TWO -3.5%), and Anworth (ANH -2.2%) leading the way. The greenback (UUP +0.9%) continues to fly higher. 17 Comments [On the Move]
Wednesday, June 19, 7:59 AM "It was the absolute worst time to raise money," says a portfolio manager, commenting on mREITs (REM) who "doubled-down" in Q1 rather than turn money away just ahead of their worst quarter since the financial crisis. Most mREIT managers, of course, are paid based on AUM, giving them an incentive to raise capital at pretty much any time. Firms such as Anworth (ANH) and MFA Financial (MFA) have compensation packages more tied to profits and chose not to join the capital-raising party this year. Comment! [Financials]
Monday, June 17, 3:05 PM Rate worries have the mREIT sector (REM -1.6%) turning sharply lower again. Leading the way today is Javelin Mortgage (JMI -5.9%) - the non-agency mREIT externally managed by Armour Residential (ARR -1.7%) - after a downgrade to Sell at Barclays, which also cuts its price target to $14 from $21. Others: Annaly (NLY -3.1%), Chimera (CIM -2.1%), Invesco (IVR -2%), Two Harbors (TWO -2.2%), Hatteras (HTS -2.1%). 10 Comments [Financials, On the Move]
Thursday, June 13, 3:39 PM Mortgage REIT (REM +4.1%) rallies are accelerating as the day draws to a close. Sector giants Annaly (NLY +4.7%), American Capital Agency (AGNC +4.2%) are closing in on 5% gains, while CYS Investment (CYS +6.2%) and Western Mortgage (WMC +7.1%) are threatening 7%. Did everybody realize all at once that higher long end rates combined with ZIRP should allow mREIT managers to invest at very profitable spreads? 30 Comments [Financials]
Thursday, June 13, 10:08 AM Armour Residentail (ARR +4.8%) surges after holding its monthly distribution steady at $0.07/share. Capstead Mortgage (CMO +2%) gains as well after maintaining its quarterly payout at $0.31. The mREIT sector (REM +1.5%). Some other names moving: Invesco (IVR +2.1%), Two Harbors (TWO +1%), Hatteras (HTS +1.6%), Anworth (ANH +1.8%), Western Asset (WMC +3.4%), PennyMac (PMT +2.1%). 14 Comments [Financials, On the Move]
Thursday, June 13, 6:49 AM Like sister company Armour Residential, Javelin Mortgage (JMI) holds its $0.23 monthly payout rate for Q3. Based on yesterday's close of $15.13, it's an annualized yield of 18.2%. Are there any buyers in mREIT (REM) land? (PR) Comment! [Financials]
Wednesday, June 12, 2:53 PM Treasurys (TLT -1.2%) fail to catch a bid even as the Dow drops triple digits. Panicky action continues in income favorites (REM -1.3%), notably Armour Residential (ARR -4.7%), where the selling has now spread to its preferred shares, the series B off 2%. The common is off 28% over the last month. Some others: New York Mortgage (NYMT -2.7%), American Capital (MTGE -2.6%), Western Asset (WMC -3.9%), Annaly (NLY -1.7%), Dynex (DX -2.6%), New Residential (NRZ -3.6%), Ellington Financial (EFC -2.2%). 11 Comments [Financials, On the Move]
Tuesday, June 11, 6:28 AM After another ugly day for the mREIT sector sector (REM -1%), CYS Investments (CYS) gives the sellers something to think about, hiking its quarterly dividend to $0.34/share from $0.32. Shares rose 3.6% in AH trade. Should the dividend be sustained (there's good reason to think it won't be) American Capital Agency's 2.9% decline yesterday leaves it yielding north of 20%. The shares hit a 4-year price low. 14 Comments [Financials]
Friday, June 7, 3:09 PM "I would not overestimate retail investors' knowledge of how this business works," says Scott Ulm, co-CEO of Armour Residential (ARR -1.3%). Income fans love mREITs (MORT -1.3%) but can suffer quick losses as rates rise. "We believe mREITs are not appropriate for most individual investors," says Edward Jones' Kate Warne, warning brokers to steer clients away from the sector. Ulm remains hopeful: "As bonds become cheaper, reinvestment becomes more profitable." Beneath a big rally for the averages, the sector is hit again today: American Capital (AGNC -2.6%), (MTGE -1.2%), Annaly (NLY -1.9%), Two Harbors (TWO -0.9%), Hatteras (HTS -1.9%), CYS (CYS -2.8%), Anworth (ANH -0.9%). 44 Comments [Financials, On the Move]
Friday, June 7, 10:26 AM "I would not overestimate retail investors' knowledge of how this business works," says Armour Residential (ARR) co-CEO Scott Ulm. Income players love mREITs (MORT), but when rates rise, losses come quick. "We believe mREITs are not appropriate for most individual investors," writes Edward Jones' Kate Warne as the brokerage warns its 12K advisors to steer clients clear. Ulm remains hopeful: "As bonds become cheaper, reinvestment becomes more profitable." With rates up today, the sector is lower again: Annaly (NLY -0.8%), American Capital (AGNC -2%), CYS (CYS -1.1%), Western Asset (WMC -0.6%), Invesco (IVR -0.6%), Hatteras (HTS -0.8%). Comment! [Financials]
Thursday, June 6, 4:28 PM With interest rate fears subsiding until at least 8:30 tomorrow morning, mREITs (MORT +1.9%) get a breather. Leading higher were American Capital (AGNC +3.4%), (MTGE +1.1%), Chimera (CIM +2.7%), Hatteras (HTS +2.4%), CYS Investments (CYS +1.9%), Javelin (JMI +4.7%), and Annaly (NLY +1.9%). One theme from conference presentations this week: Most have taken advantage of widening spreads to buy - if rates come in, they're set to profit. 11 Comments [Financials, On the Move]
Wednesday, June 5, 7:56 AM More on Mortgage applications: The refinance index dove 15% to its lowest level since November 2011 as the average 30-year fixed-rate mortgage jumped 17 bps to 4.07%, the highest in more than a year. The index is now off about 40% in a month. Mortgage REITs (MORT,, REM) certainly face a few issues at the moment, but prepayment risk is no longer one of them. Struggling enough finding growth, the refinancing cash cow benefitting the big banks (WFC, BAC, JPM, C isn't producing at the moment. 11 Comments [U.S. Economy, Financials]
Tuesday, June 4, 3:25 PM The mREIT (MORT +1.6%) sector gains with sliding averages always good for creating a bid for the sector, and as the industry continues to present en masse at the KBW Mortgage Conference (earlier). The gist: It's clearly been a bad year for mortgages (see WMC presentation, page 7), but spreads are far wider now than they were several months ago (when the bear case was spreads were too narrow). Buyers of mortgages now are getting far better pricing. Leading are Two Harbors (TWO +3.5%), (presentation), Chimera (CIM +2.7%), Ellington (EFC +1.9%), (EARN +0.1%), (presentation), PennyMac (PMT +3.9%), (PFSI +0.5%). 1 Comment [Financials]
Tuesday, June 4, 11:18 AM If you believe California housing, MFA Financial might be your mREIT of choice. Of the company's $5.4B non-agency portfolio, 46.1% of the underlying loans are in California. Next is Florida with 7.9%. MFA has outperformed other non-agency players (JMI, DX, IVR, MTGE) over the last year. Also of interest is the disappearing universe of non-agency MBS - it was $2.25T pre-crisis and now only about $900B. (KBW Mortgage Conference presentation) Comment! [Financials]
Tuesday, June 4, 9:28 AM More from CYS Investments at KBW (previous): The speed (page 9) with which mortgage rates have increased in unlike anything seen even during the financial crisis, says CEO Kevin Grant. He muses over whether Bernanke's May testimony (taper) was confused messaging or an intentional market test. The punishment inflicted on mREITs (MORT) is well-known, but don't forget: Refinance activity will crater - gain on sale windfall to banks may be over, home affordability is now diminished, banks will be pushed to Treasurys over credit risk as the ROE on government paper is now improved. Grant's talk (webcast) is one all mREIT investors will value. 25 Comments [Financials]
Friday, May 31, 12:59 PM Renewed selling hits mREITs (MORT -1.2%) as Treasury yields turn decidedly higher, TLT -0.8%. Getting the worst of it today is Ellington Financial (EFC -3.3%) - a partnership, not a REIT; it's more trading shop, but still leveraged to credit and interest rates. It's recently IPOd mortgage REIT counterpart EARN -1.1%. Also notably lower is CYS Investments (CYS -2.6%), American Capital (AGNC -1.8%), (MTGE -1.5%), Annaly (NLY -1.3%), and Armour Residentail (ARR -1.3%). 15 Comments [Financials, On the Move]

MORT Market Vectors Mortgage REIT Income ETF

MORT

Market Vectors Mortgage REIT Income ETF