Goldman and Pimco Are Loading Up on Mortgage Bonds

  • Subprime mortgage-backed securities have gained 6.9% this year
  • Taint of the crisis can translate to value in mortgage bonds

Some big investors are getting so antsy about corporate junk debt that once-unloved mortgage bonds look safe in comparison.

Pacific Investment Management Co., Goldman Sachs Asset Management, Columbia Threadneedle and others are snatching up bonds tied to subprime mortgages and other home loans made before the housing crisis, while selling speculative-grade company debt. They say junk yields are too low for the risk investors are taking, and securities backed by mortgages — which have already gained as much as 6.9 percent this year according to Bank of America Corp. data — offer higher potential returns given the risk…

Goldman and Pimco Are Loading Up on Mortgage Bonds

Categories : Finance

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