Ginnie Mae Funds

Terry Says

Double bad! First, the Ginnie Mae funds own mortgages. People are refinancing old high rate mortgages and paying them off. So the yields of the mortgages in the funds are dropping.
If it is a “managed fund” then the managers have to reinvest in lower rate mortgages. People will hang on to those as long as possible. You’ll be stuck with a lower yield.
Then down the road, with all this money creation, there will be inflation and HIGHER interest rates. You’ll have a low rate fund, people will sell the shares and the price will drop.

Right now, I think Ginnie Maes are a lose/lose proposition.