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CYS Investments, Inc. Message Board

divyinvstr 1 post  |  Last Activity: 19 hours ago Member since: Jun 30, 2011
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  • Reply to

    RECENT DROP beside divy

    by bn538 Sep 30, 2014 3:26 PM
    divyinvstr divyinvstr 19 hours ago Flag

    Yes, there is sensitivity to movements in the 10 year UST, but much (though not all) of the Treasury movement is hedged. What is not hedged is the relative price movement between mortgage backed securities and and UST securities. When mortages widen versus Treasuries MREITs generally trade down as there has been an unhedged hit to book value. The opposite is also true, MREITs tend to perform positively when mortgages yields tighten to Treasuries.
    Additionally, fear (as well as actual) of short rates rising will cause MREIT prices to decline as any relative rise in short rates reduces the spread between borrowing costs and the portfolio yield, directly reducing income available to pay dividends.

    Sentiment: Hold

CYS
8.43+0.19(+2.31%)Oct 1 4:03 PMEDT

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