Which floor has the door to US homes?
With the short ABX trade over and done with, Connecticut-based hedge fund Structured Portfolio Management has looked to other areas of the real estate market for investment opportunities. In March, the firm launched the Directional Mortgage Prepayment Strategy fund, which invests in various types of interest-only mortgage backed securities. The fund is designed to take bets on the levels of prepayments on mortgages. In a falling interest rate environment, mortgages tend to witness high prepayment rates as owners take advantage of cheaper refinancing.
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