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Newcastle Investment Corp. Message Board

  • bobdbeck bobdbeck Oct 17, 2012 2:00 PM Flag

    New 25+% yeild mREIT ETN

    MORL symbol. initiated by UBS.

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    • Think back a couple of years ago. Smart money for little guys like us said stay away from ETF's. I believed it then and I still believe it. Strictly for day traders. Guys like Blackrock are really pushing them because they are making tons off them, but not the people they are selling to, the buy and hold folks, even if it's just for a month or two. Pick a couple out and follow them for a couple of qtrs, I guarantee you will lose money.

    • Can't find MORL on yahoo. How can it yeild soooo much; leverage?

      • 1 Reply to jrfillion
      • 2X leverage. Here's one of the news announcements::::::::::

        On top of already high levels of investor interest in mortgage REITs, UBS is piling on some leverage, launching the ETRACS Monthly Pay 2xLeveraged Mortgage REIT ETN (MORL), which UBS trumpets as the only leveraged exchange-traded play on mortgage REITs on U.S. exchanges.

        “This ETN is designed for investors who seek a high yield and are bullish on the mortgage REIT sector,” said Paul Somma, senior ETRACS structurer, in a statement. “MORL offers high monthly income potential and leveraged exposure to a mortgage REIT index, all by way of a single, exchange-traded security.”

        Specifically, UBS says MORL offers monthly compounded 2x leveraged exposure to the Market Vectors Global Mortgage REITs Index - which UBS touts would equate to a whopping 24.82% - and a variable monthly coupon linked to 2 times the cash distributions on the index constituents.

        Of course, mortgage REIT investors might already be content with the level of leverage inherent in mREITs themselves, or with established mREIT ETFs like the Market Vectors Mortgage REIT Income ETF (MORT), which tracks the same index and currently offers a 9.43% yield, or the iShares FTSE NAREIT Mortgage PLUS Capped Index Fund (REM) with its 11.5% yield.

        By index weighting, the current top five holdings within the Market Vectors index are Annaly Capital Management Inc (NLY) 19.03%, American Capital Agency Corp (AGNC) 14.53%, Two Harbors Investment Corp (TWO) 5.20%, MFA Financial Inc (MFA) 5.17% and Hatteras Financial Corp (HTS) 4.84%

 
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