Reuters (05/02/08); Haviv, Julie
Buoyed by fast-paced purchasing activity from a range of investors, particularly Fannie Mae and Freddie Mac, U.S. mortgage-backed securities recorded unprecedented excess returns over Treasuries in April. According to Merrill Lynch, the MBS index generated an excess return of 1.546 percent, representing the biggest one-month result since the company started tracking such information more than 10 years ago. In addition to high interest from the housing government-sponsored enterprises, the MBS market was helped by overseas demand--especially from Asian investors. Overall, investors have become less skittish in recent weeks about buying spread products as the credit crunch has shown signs of relaxing.
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