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From: brett@ucla-cs.UUCP
Newsgroups: net.invest
Subject: Re: Info on \"Ginny Maes\"
Message-ID: <7142@ucla-cs.ARPA>
Date: Wed, 16-Oct-85 15:04:44 EDT
Article-I.D.: ucla-cs.7142
Posted: Wed Oct 16 15:04:44 1985
Date-Received: Sat, 19-Oct-85 07:56:34 EDT
References: <844@decwrl.UUCP>
Organization: UCLA Computer Science Department
Lines: 43

Excerpted from Money, Aug 85 issue:

Another attractive choice for conservative investors is
Ginnie Maes (Government National Mortgage Association
pass-through certificates).  They are available through
all major brokers.  Newly issued Ginnie Maes have a $25,000 
minimum; older issues may be available in amounts as small as 
$10,000.  Their interest and principal payments are federally
guaranteed.  These securities are backed by pools of mortgages and
pass-through interest and principal to the certificate holders
as the mortgages are paid off.  At present, the average effective
annual yield on GNMAs is 11.5%, about three-quarters of a point
more than the yeild on comparable Treasury bonds.  The
drawback is that principal repayments on mortgages can't be predicted,
so you don't know what the yield really is over the life
of a particular GNMA issue.  Even worse, the repayment schedule
that is used in figuring ostensible GNMA yields often
produces inflated figures.

Comment: So is it worth it over Treasury bonds?

Dexter Sentf, managing director of fixed income research at
First Boston suggests that investors be skeptical of issues that 
sound too attractive.
...
...
Another choice is GNMA mutual funds.  Among the highest yielding
no-loads are Vanguaged Fixed Income Securities - GNMA, which pays
11.2% (800-662-7447; min invest $3,000) and Lexington GNMA Income
paying 10.7% (800-526-4791, min invest $1,000).


-- 
Brett Fleisch
University of California Los Angeles
LOCUS Research Group
3804-f Boelter Hall
Los Angeles, CA 90024
Phone: (213) 825-2756, (213) 474-5317 

brett@LOCUS.UCLA.EDU
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