ThesisInvesco Mortgage Capital: the story is balanced — Federal Reserve policy shifts and forward guidance on rate trajectory - affects both asset yields and financing costs…
dividend - mREITs are structured to distribute 90%+ of taxable income as dividends to maintain REIT status.
Extreme sensitivity to both rate levels and volatility.
Watch on earnings: 3-month SOFR or repo rates - directly impacts financing costs on leveraged portfolio, 10-year Treasury yield - proxy for long-term mortgage rates and portfolio duration exposure, 30-year fixed mortgage rate - drives refinancing activity and prepayment speeds.
One Sentence Summary:
Invesco Mortgage Capital: the story is balanced — federal reserve policy shifts and forward guidance on rate trajectory - affects both asset yields and financing costs asymmetrically.
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