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American Capital Agency Corp. Message Board

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  • jtrader64 jtrader64 Dec 3, 2012 12:08 PM Flag


    I found this in the distribution release from UBS regarding MORL:

    "Note: RWXL, DVYL, SDYL and MORL pay a variable monthly coupon linked to 2 times the cash distributions, if any, on the respective underlying index constituents, less withholding taxes, if any. Variations in the amount of monthly distributions will lead to large variations in the Current Yield as calculated above. As such, the Current Yield for each is not indicative of future coupon payments, if any, on these ETNs."

    The dividend on the first ex date of 11/8 was zero on MORL because no cash came in during the first month of trading. The next ex date around 12/7 or 12/10 is likely to be zero or near zero as most mReits will be paying out later in December. Thus, it may make sense to buy and hold MORL for most of December if you want to use it to play the dividend runs of December. It's two largest holdings are NLY and AGNC so watch the runs in those issues and sell when you think those runs are ending.

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    • Interesting idea Jtrader. To bad there aren't any options on MORL!

    • Exactly my point. You're not playing any dividend run of MORL itself, just the divy runs of its holdings; AGNC NLY and so on. Since it is a REIT ETN and we are in the prime 1 month before ex date (for each roughly) it should go up about twice as much, in percentage, as its holdings. This could be upwards of a 10% swing. This is the first quarter, since its inception, in which it coincides with the broader REIT markets ex date so it will be interesting to see whether this is true or not.

18.01+0.17(+0.95%)Nov 27 1:00 PMEST