Investors Sitting On the Sidelines Should Take a Look At Ginnie Maes, Says Pre-Eminent Bond Manager Payden & Rygel.

Business Editors

Investors sitting out current stock market volatility may want to consider investing in Ginnie Maes, the government-backed mortgage securities underlying home mortgages, according to David Ballantine, managing director of Payden & Rygel, one of the nation's most pre-eminent bond managers.

"It's difficult to find an investment with a bigger comfort factor," adds the bond expert.

"Ginnie Mae funds can provide a better return than parking your cash in a money market fund," says Ballantine. "With a current yield of around 6 percent, a Ginnie Mae beats money market and savings accounts, currently with 1 and 2 percent returns, by a country mile."

Ballantine notes that Ginnie Mae funds can be as liquid as money market accounts, and that many, including the Payden GNMA Fund, have check writing privileges. Furthermore, they are the only mortgage backed securities explicitly guaranteed by the full faith and credit of the U.S. Government, giving them the same solid underpinning as Treasury bonds.

"There are still risks, of course, as there are with any bond fund. Examples include rising interest rates and, for mortgages, the associated prepayment risk. But some of the risks can be mitigated by investing in Ginnie Mae mutual funds that have a good track record, are professionally managed, offer diversified exposure and low fees," Ballantine explains.

Since 1968, GNMA has been a cornerstone of the American mortgage market. Chartered by the United States Congress as a government corporation, GNMA provides liquidity for low- and moderate-income and first-time homebuyers. The program funds mortgages for more than 25 million households annually, making homeownership a reality for millions of low- and moderate-income Americans.

Founded in 1983, Payden & Rygel (www.payden.com) is a trusted global investment manager. With nearly $40 billion in assets under management, Payden & Rygel is headquartered in Los Angeles with offices in London, Dublin and Frankfurt. The firm's family of 20 domestic mutual funds is distributed through Paydenfunds (www.Paydenfunds.com) and similar strategies are domiciled in Dublin for offshore accounts.