AGNC Investment (NASDAQ: AGNC) is an interesting stock because of the complexity of what it does. And that complexity bleeds into the way investors need to think about this ultra-high-yield mortgage real estate investment trust (REIT). For some investors, AGNC Investment will be a buy right now. For others it is a stock that will never make sense to buy, despite its huge yield. Here’s what you need to know.
AGNC Investment is a mortgage REIT, which is a complex niche of the REIT sector. You could replicate what a property-owning REIT does, on a much smaller scale, with a rental property. Most investors simply couldn’t do what a mortgage REIT does. To simplify, AGNC Investment buys mortgages that have been pooled together into bond-like securities.
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