Some Investors Think Mortgages Look Good

Investor's Business Daily (08/18/08) P. A11; Emspak, Jesse
AFBA Five Star Balanced fund portfolio manager Gary Cloud says investors are turning their attention to mortgage-backed debt now that 10-year Treasury yields are more than a percentage point under inflation. He notes that the recently passed housing bill prompted investors to look more favorably at Fannie Mae and Freddie Mac debt, especially considering a provision that allows the Treasury to offer more credit to the government-sponsored enterprises as necessary. Meanwhile, the $658 million iShares Lehman MBS Bond is among the mortgage-based exchange-traded funds reporting gains during the week ended Aug. 15, when it returned 0.16 percent; the bond's year-to-date return is 0.86 percent.