Summary
- Following continued requests by readers, this article analyzes fixed-rate agency MBS price movements during the third quarter of 2018 (through 9/14/2018).
- Since most mREIT companies have a portion of investments in fixed-rate agency MBS, providing this analysis will benefit readers who want to understand current trends within the sector.
- When compared to earlier in the quarter, a more “negative” relationship has developed between MBS pricing and derivative instrument valuations during the third quarter of 2018 (through 9/14/2018).
- This article also provides my projected valuation changes within AGNC’s and ORC’s investment/MBS and derivatives portfolios through 9/14/2018.
- My current BV projection (BV as of 9/14/2018), buy/sell/hold recommendation, and current price target for AGNC and ORC are in the “Conclusions Drawn” section of the article.
Focus Of Article:
The focus of this article is to provide readers fixed-rate agency mortgage-backed security (“MBS”) price movements during the third quarter of 2018 (through 9/14/2018). This includes pricing for both 15- and 30-year fixed-rate agency MBS holdings.
Due to the constant fluctuations of mortgage interest rates/U.S. Treasury yields, a growing number of readers have asked that I periodically provide this specific analysis showing how changes in MBS pricing directly impact the mortgage real estate investment trust (mREIT) sector. I believe providing more timely articles of this nature allows readers the ability to pursue more active investing strategies in times of heightened volatility to either enhance one’s total return or minimize one’s total losses.
