You're watching...
Angel Oak Capital Head Portfolio Manager Brad Friedlander on how investors can boost their portfolios with investments in the housing sector.
Also in this playlist...
Auto-advance: ON
Auto-advance
This transcript is automatically generated
So so let's talk about a piece of housing data that's gotten us excited here and then Greta the market isn't but we are because the Case Shiller Index which is.
A real index for home prices is showing more positive news today.
In fact it's the fourth month in a row where we started to see everything really continue to move higher up off the floor.
Now if the Fed is jumping into -- buying mortgage backed securities which they said they -- it right.
How do you invest on that how do you get to be part of that wave in it in a way it's called momentum investing -- the momentum is going that -- you don't fight it go the other way it's so huge trauma Federal Reserve level.
There's a way to make some money office let's bring him -- Friedlander he's the head portfolio manager of Angel -- capital.
Investing primarily right now in non agency mortgage bonds -- Let's talk about where your money is and then what you anticipate will be the real payoff here.
Sure will -- we've been we've seen so much these improvements in housing fundamentals.
We've seen it reported today with case Shiller.
Really not spoken much about her mortgage delinquencies as well across the country those are down roughly 25% or so in the last two years.
Helping home prices has been mortgage inventories -- housing inventories as a whole.
Of those have been whittled down as well to roughly.
Two and a half million that's about we flirted with about twelve months of supply and housing -- existing homes and that's come down to roughly six months of supply.
-- new homes is another good story as well you know 300 million Americans at least 6070 million.
Homeowners.
There -- 142000.
New homes available on the markets -- the reasons why we're seeing so much optimism right now with the homebuilders.
So home prices.
You were beginning to see some improvement I'm joining you hear from Atlanta which is.
Supposedly one of the worst cities across the country on a year over year basis and we're seeing a shortage in investment opportunities.
In a enough foreclosures we're not of course doing that ourselves but -- but investors are are are looking and -- finding a shortage right now.
Well let's talk about your -- because.
We just show the year over year it may have -- a year to date but you are in the top 1%.
Of your entire category you were outperforming more than 12100 other funds -- try and mimic what you do.
What is.
That has the secret sauce for the -- -- multi strategy income fund I think this is a great chart I give you props here is this the Fed effect or is it just.
You being able to pinpoint and spot with laser focus and opportunity going into it and your fund that follows the trend.
-- thanks who we are we continuing to look continues to scour the investment universe and particularly fixed income.
For.
-- opportunities we're seeing this improvement in housing.
We're finding yields available still in one sector -- look particularly attractive to us this is a non agency.
Mortgage bonds sector that's -- sector that's not guaranteed.
By Fannie or Freddie really -- not well.
-- at least not -- there you've got 73% of the fund in non agency mortgage backed securities it again.
There is risk there and yet that's your message really is with the risk is now coming major reward for -- Absolutely -- -- we believe so this is an area where you know credits continue to improve.
As an investor your risk is tied more to homeowners across the country and their ability to make their monthly payments and make their mortgage unit and principal and interest payments.
But we continue to see.
Opportunities there yields within that sector still attainable.
In the five to 7% range in what continues to -- me the most is that.
It's one sector where that the best is not priced in yet the housing recovery still not priced into this sector.
This was an area where he had many investors who were burned and don't wanna be burned again.
So that continues to -- -- Ross is well.
The you know it as far as a connection to the Fed is well when you see rates coming down like they have.
The purchases of mortgage backed securities -- you know Fannie and Freddie mortgages.
Drawing down drawing down those rates encouraging refinancing.
This is a sector within think -- within fixed income that's not trading at a hundred cents on the dollar you're still able to find bonds below that are essentially being called back to you well.
Intentionally or not the Fed in -- way with its actions is punishing savers and you can either fight that complain about it you can make money off -- like -- has good to see you thank you very much.
Thank you Brett Friedlander -- portfolio manager of Angel oak capital he's got about 900 million in assets under management and we will put the name of the fun -- the ticker symbol which by the way is eight and GLX.
On our FaceBook dot com slash -- --
