Why AGNC’s 15% Yield Might Be Unsustainable But Still Worth Considering


  • AGNC Investment Corp. has a 15% forward yield, but it may not be sustainable due to negative net interest income.
  • The company relies on derivatives to mitigate the risks of borrowing short and lending long, but this reduces profitability.
  • The current environment of high short-term rates and lower long-term rates may normalize, potentially benefiting AGNC’s business model.

Putting money into or out of house

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AGNC Investment Corp. (NASDAQ:AGNC) is a mortgage REIT, and it is currently sporting a 15% forward yield. It buys Agency MBS assets with short-term leverage through RePo agreements.

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