MORT - AGNC Investment: I Expect Headwinds Ahead

2024-04-12 03:45:14 ET

Summary

• AGNC Investment Corp. has underperformed both the overall market and the mortgage REIT sector.
• Uncertainties surrounding interest rates and the possibility of Agency MBS spread widening are the key issues to blame in my view.
• Unfortunately, I don't see these issues going away anytime soon.
• They could trigger other issues such as decline in mortgage origination and uptick in default rates.

AGNC has underperformed

If you are a shareholder of AGNC Investment Corp. ( AGNC ), you must be quite disappointed by its recent performance. The stock, a leader in the mREIT space, has underperformed both the overall market and the mortgage REIT sector. More specifically, the chart below shows the total return performance of AGNC compared to the SPDR S&P 500 ETF Trust ( SPY ) and also VanEck Mortgage REIT Income ETF ( MORT ) over the past year. As seen, AGNC delivered a total return of 8.5%, whereas SPY had a total return of 27.3% and MORT had a total return of 12. 0%....

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