ETRACS Monthly Pay 2XLeveraged Mortgage REIT ETN (NYSEMKT:MORL)

panda72 (99.44) Submitted: 5/4/2013 9:30:40 PM : Start Price: $23.61 MORL Score: +6.66

Real money yield play. Yield has not met expectations but capital appreciation has greatly surprised. I ordinarily bet against leveraged instruments but this one is an exception. The tracking is monthly rather than daily so you only get hit with 12 yearly errors and I think very highly of the underlying mortgage REIT industry. Once the dividend stabilizes at something close to double the average of the big boys in REIT space, this should do very well.

GGGilmore (70.63) Submitted: 2/14/2013 5:09:38 PM : Start Price: $27.38 MORL Score: -5.06

I believe that short term rates will stay low for at least 2 more years. Long term rates have been inching up. This 2xleverage fund is all about mortgage REITS, which make their money on the spread between long term rates on the mortgages they buy and short term borrowings to buy the mortgages. After QE3 started, the MReits all took a hit, but the affect of the current $95 billion a month purchase by the FED seems to be wearing off a little. Mortgage rates have risen about .10% since the bottom a couple of months ago. This is good for the MReits and, with this ETF 2 x's leverage, this should rise in value even as it kicks out dividends of 20%+. Though it pays a dividend monthly, it passes through the dividends it receives. Most MReit pay quarterly, so the dividends will be very large one month of each quarter and much, much smalled the other 2 months. Keep this in mind and pay attention to what month of the quarter it is.