AGNC: Instability, Diversity And Cash

Patient Tech Investor
3.99K Followers
(9min)

Summary

  • The current coupon spread to a blend of swap rates peaked at 230 basis points, nearing the COVID pandemic high of 235 basis points.
  • Recent spreads were 220 basis points, indicating elevated levels but slightly reduced from the peak.
  • AGNC effectively managed recent market volatility, although its net asset value was negatively impacted by the mortgage spread widening.
  • The expected return on AGNC's portfolio is now higher, reflecting the wider spread levels.

An egg teetering on the edge of a plank

Richard Drury

AGNC (NASDAQ:AGNC), a leveraged model, invests in mortgage back securities spiking the returns by funding its investments with lower interest rate entities. Hedges using interest rate swaps, US based securities and other types protect the investments from major volatility

This article was written by

3.99K Followers
I have been an investor for several decades enduring the 87 crash, 2000 crash, and 08 crash. I do use trading systems developed with TradeStation. I have enjoyed the rewards from both buy and hold and trading. My professional experiences includes several decades as a process control engineer. I hold a JD from an eastern law school.

Analyst’s Disclosure:I/we have a beneficial long position in the shares of AGNC 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.

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