Mortgage-backed securities outperformed all other asset classes in 2012.
Why would an average person have an interest in MBS? Well, they have an attractive yield relative to Treasuries and Swaps.
The downside is an MBS portfolio requires active management. Additionally, mortgage analytics are needed for this, as is research into the housing market.
The risks of investing in MBS
MBS are subject to prepayment risk (which shortens the life of the security), When interest rates are falling, prepayments tend to rise.
Why would an average person have an interest in MBS? Well, they have an attractive yield relative to Treasuries and Swaps.
The downside is an MBS portfolio requires active management. Additionally, mortgage analytics are needed for this, as is research into the housing market.
The risks of investing in MBS
MBS are subject to prepayment risk (which shortens the life of the security), When interest rates are falling, prepayments tend to rise.
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