The Hidden Risk In Ginnie Mae Mortgage-Backed Securities

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Ginnie Mae MBS are vulnerable to the biggest risk an MBS portfolio faces in a low interest rate environment — prepayments.

Is There A Better Choice For Ginnie Mae Investors? by Jason Callan, Columbia Threadneedle Investments Ginnie Mae mortgage-backed securities are popular, but these government backed bonds aren’t risk-free. For less prepayment risk and superior total return potential, investors may be better served by turning to Fannie Mae and Freddie Mac. Government National Mortgage Association mortgage-backed securities…