With the recent announcement by the Fedthat interest rates will stay low for at least the next couple of years, “maybe leveraged credit structures have an appropriate place in someone’s portfolio,” Gary Ran, partner and chairman of Telemus Capital Partners, which oversees nearly $2 billion, told CNBC Monday.
“We’ve been looking at closed-end funds, for example, that sell auction rate preferred to sell their portfolios, as well as, some of the mortgage REITs [real estate investment trust] that have leverage built in,” Ran said.
He recommended the REIT Annaly Capital Management. “[NLY is] double-A rated paper now, it used to be triple-A, so no credit, interest rate risk. So you can manage that,” Ran said. “The yield is currently approximately 14.5 percent, the dividend was recently announced—.60 cents for the quarter, at roughly $16.5 dollars, we think it’s attractive.”
Ran also recommended Nuveen Floating Rate Income Opportunity Fund, which invests in fixed income markets of the U.S. The fund invests at least 80 percent of its assets in adjustable rate loans, and trades at a 4 percent discount to its net asset value.
Telemus Capital currently owns 3.5 percent of the outstanding shares in JRO as of August 31, 2011.