Hedge Fund Returns To Fannie, Freddie Bonds

Aug 11 2014 | 5:13am ET

Months after unloading its holdings of agency mortgage bonds, 400 Capital Management is jumping back in, taking advantage of a recent sell-off.

400 chief investment officer Chris Hentemann said the firm began buying Fannie Mae and Freddie Mac’s new risk-sharing bonds last week. The move came after the bonds dropped about 10% over the past three months.

“We’re dipping our toes back in,” Hentemann told The Wall Street Journal. “It was a pretty significant move, and leaves pricing more closely aligned with the credit risk we are buying.”

400 had been buying such bonds since the middle of last year. But it took advantage of the nearly year-long rally to sell its entire holding earlier this year.


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