Pj1369 wrote:
@haulingthescoreup wrote:
Most of my Roth is in their GNMA trust, and I made about 7.5% on it last year, through all the horrendous mess. Principal and interest are guaranteed; as I recall, your only risk is that the posted interest will fall, due to declining mortgage rates, I suppose. But at least you know what it is.posted interest will fall? I'm confused...say more please.
Oh, dear, you're going to make me remember what was in my fevered brain back in January, aren't you??
OK, from their site:
USAA GNMA Trust (USGNX)For the bit about "posted interest will fall", I think I was trying to say that as the APR's on the underlying mortgages fall, so will the return on the fund. It's a taxable bond fund, so you do have some heads-up as to what it will be paying. And it's waaaay down this year, sadly.
* Provides potential income you can take or reinvest.
* No credit risk; principal and interest are guaranteed by U.S. government.
* Higher income potential than U.S. Treasuries.
Investor Risk Profile
The fund's investment objective is to provide a high level of current income consistent with preservation of principal. Normally at least 80% of the fund's assets will be invested in GNMA securities backed by the full faith and credit of the U.S. Government. These securities typically take the form of pass-through certificates, which represent ownership in a pool of mortgage loans.
It has still out-performed my regular mixed-bond fund, the one that's supposed to track the Barclays Capital U.S. Aggregate (U.S. Aggregate) Index, which I could swear used to be called the Lehman Brothers Something-Something Index. Back when there was a Lehman Brothers, of course.