AGNC Investment: Hedging Actions Protect 9% Yielding Preferreds

  • AGNC Investment Corp.'s preferred shares, especially AGNCO, offer a safer high-yield alternative amid economic uncertainty and rising interest rates. AGNC's hedging strategies, including interest rate swaps and shorting US Treasury bonds, have effectively offset borrowing costs and supported net interest income. Skepticism remains for AGNC's common shares due to dilution and declining tangible book value, despite a high dividend yield.