Summary
- AGNC mitigates prepayment risk through hedging.
- Portfolio rebalancing diminishes interest rate exposure.
- Dividend sustainability can be achieved through derivative portfolio strategies.
- Several hedge fund investors took up new positions in AGNC.
American Capital Agency (NASDAQ:AGNC) manages to maintain a balance between steady results and risk exposure. The company funds its investments through structured borrowing in the form of repurchase programs, reflected in its D/E ratio of 6.20, leading to significant dividends with a payout ratio of 800%. Although an interest rate hike may adversely impact its net interest income and dividends, AGNC implements an effective hedging and portfolio rebalancing strategy that is expected to sustain the company's long-term growth... READ MORE
- AGNC mitigates prepayment risk through hedging.
- Portfolio rebalancing diminishes interest rate exposure.
- Dividend sustainability can be achieved through derivative portfolio strategies.
- Several hedge fund investors took up new positions in AGNC.
American Capital Agency (NASDAQ:AGNC) manages to maintain a balance between steady results and risk exposure. The company funds its investments through structured borrowing in the form of repurchase programs, reflected in its D/E ratio of 6.20, leading to significant dividends with a payout ratio of 800%. Although an interest rate hike may adversely impact its net interest income and dividends, AGNC implements an effective hedging and portfolio rebalancing strategy that is expected to sustain the company's long-term growth... READ MORE