The Quest for Yield: Investing in REITs and Bank Debt

The video explores the current financial market landscape, focusing on the search for yield and the impact of duration on bond returns. It highlights alternative investment opportunities in non-agency mortgages and REITs, and discusses the potential in bank debt and financial preferreds. The discussion emphasizes the challenges posed by falling interest rates and a flattening yield curve, urging investors to consider less conventional paths for returns.

What has been the primary driver of bond portfolio performance recently?

• Duration

• Credit quality

• Yield

• Inflation

Which investment area is suggested as an alternative to traditional benchmarks like the Barclays AG?

• High-yield corporate bonds

• Legacy non-agency mortgages

• Government bonds

• Emerging market equities

What is a key factor contributing to the attractiveness of REITs?

• Improving consumer balance sheets

• Low volatility

• Government backing

• High liquidity

In the banking sector, where is there perceived value despite challenges in equity?

• Investment-grade financial debt

• Government securities

• Bank equity

• High-yield bonds

What condition is necessary for earning good spreads in financial preferreds?

• Rising short-term rates

• Stable long-term rates

• Increasing inflation

• Decreasing credit quality