Why The Agency MBS Sector Is Worth A Look Now

Sep. 04, 2023 10:06 PM ET, , , , , , , , , , , 10 Comments

Summary

  • Agency MBS is an attractive asset class for income investors due to its cheap valuation, high quality, and diversification benefits.
  • The option-adjusted spread for Agency MBS is elevated compared to corporate credit spreads, making it an appealing investment.
  • There are various ways to invest in Agency MBS, including through mortgage REITs, leveraged CEFs, unleveraged ETFs, and mREIT preferreds.
  • Looking for a helping hand in the market? Members of Systematic Income get exclusive ideas and guidance to navigate any climate. Learn More »

Business And Finance Concept Of A Bull Market Trend High Quality

Darren415

In this article we revisit the Agency MBS sector as well as the different types of securities and investment vehicles that focus on this sector. Agencies are often overlooked by investors due to their middling level of yield. However, there are

Check out Systematic Income and explore our Income Portfolios, engineered with both yield and risk management considerations.

Use our powerful Interactive Investor Tools to navigate the BDC, CEF, OEF, preferred and baby bond markets.

Read our Investor Guides: to CEFs, Preferreds and PIMCO CEFs.

Check us out on a no-risk basis - sign up for a 2-week free trial!

This article was written by

13.25K Followers

ADS Analytics is a team of analysts with experience in research and trading departments at several industry-leading global investment banks. They focus on generating income ideas from a range of security types including: CEFs, ETFs and mutual funds, BDCs as well as individual preferred stocks and baby bonds.

ADS Analytics runs the investing group Systematic Income which features 3 different portfolios for a range of yield targets as well interactive tools for investors, daily updates and a vibrant community.

Analyst’s Disclosure:I/we have a beneficial long position in the shares of NLY.PR.I, AGNCL either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Recommended For You

Related Stocks

SymbolLast Price% Chg
AGNC--
AGNC Investment Corp.
AGNCL--
AGNC Investment Corp. 7.75% DP PFD G
AGNCM--
AGNC Investment Corp. 6.875 DEP REP D
AGNCN--
AGNC Investment Corp. CUM 1/1000 7% C
AGNCO--
AGNC Investment Corp. 6.5% DP SH PFD E

Related Analysis