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AGNC Investment Reports Q1 Earnings: REIT ETFs in Focus

Zacks Equity Research

REIT AGNC Investment Corporation AGNC reported first-quarter 2017 net spread and dollar roll income (excluding $0.03 per share catch up premium) of $0.64/ share, beating the Zacks Consensus Estimate of $0.58. It reported net interest income of $198 million for the quarter in discussion, up roughly 1% from $196 million a year ago. However, net interest income declined roughly 33% from $295 million in the last quarter of 2016.


Moreover, it reported high variability in Other Income (Loss) data, with loss of $105 million in the quarter against a gain of $741 million in the previous quarter. It had reported a loss of $935 million in the year-ago quarter.


Comprehensive income per share came in at $0.35 against a loss of $1.19 in the previous quarter. The company had recorded a gain of $0.01 in the year-ago quarter. Moreover, the company declared a dividend of $0.54 per share for the quarter.


The company reported net book value per share of $20.98, down 0.9% from $21.17 in the previous quarter. Its tangible net book value per share also decreased to $19.31 from $19.50 in the previous quarter. The company cited Agency MBS underperforming interest rate hedges in the quarter as the reason for the decrease.


Shares of AGNC closed 0.53% higher at market close on April 26, 2017.


Let us discuss the ETFs that have a relatively high exposure to AGNC (read: Why to Buy REIT ETFs in 2017?).


iShares Mortgage Real Estate Capped ETF REM


This fund offers exposure to the U.S. residential and commercial real estate space. It has AUM of $1.3 billion and charges a fee of 48 basis points a year. It has 10.44% exposure to AGNC (as of April 25, 2017). It bears significant concentration risk as almost 70% of the fund assets are allocated to the top 10 holdings. The fund returned 11.94% in the year-to-date frame and 32.7% in the past one year (as of April 26. 2017). It closed 0.88% higher at market close on April 26, 2017. The fund currently has a Zacks ETF Rank #4 (Sell) with a Medium risk outlook.


VanEck Vectors Mortgage REIT Income ETF MORT


This fund seeks to provide exposure to the U.S. mortgage REIT space. It has AUM of $147.7 million and charges a fee of 41 basis points a year. It has a 7.82% exposure to AGNC (as of April 26, 2017). It bears significant concentration risk as over 63% of the fund assets are allocated to the top 10 holdings. The fund returned 12.57% in the year-to-date frame and 23.1% in the past one year (as of April 26. 2017). It closed 0.90% higher at market close on Wednesday, April 26, 2017. The fund currently has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook.


Below is a year-to-date chart comparing the performance of the funds and AGNC.


 
Source: Yahoo Finance


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ISHARS-MTG RE (REM): ETF Research Reports
 
VANECK-MTG REIT (MORT): ETF Research Reports
 
American Capital Agency Corp. (AGNC): Free Stock Analysis Report
 
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