- RCS has been a very poor performer over the past few months. This pain could make for a contrarian buy signal.
- Despite a drop over 18%, the fund is still not "cheap", when we compare its market price to the underlying value. This makes me reluctant to be a buyer here.
- Agency MBS remain well supported by fundamentals in terms of credit risk. Housing prices are rising and delinquencies are low. Yet, there is plenty of risk with Fed tapering.
- RCS' duration is not low enough to really generate my interest, as inflation remains red hot and the Fed has turned less hawkish.
For further details see:
RCS: It Has Dropped Almost 20%, And It's Still Not Cheap