KBW's picks for a Summers-less Fed

|By:, SA News Editor

Remaining positive on mREITs (REM) as Summers' withdrawal reduces the chance of a continued sharp move higher in rates, KBW has 3 picks for a flattening yield curve.

For an aggressive play, try CYS Investments, trading at an estimated 85% of book value, and among the more rate-sensitive of the sector thanks to its relatively high duration gap and leverage.

More conservative picks would be Gary Kain's two vehicles, American Capital Agency (AGNC) and American Capital Mortgage (MTGE), both trading at about 91% of book, but better-hedged against higher rates.

Related ETFs: MORT, MORL.