Contrarian L.A. Buyer To Extend Duration
Payden & Rygel Investment Management plans to extend duration by half a year because it believes the U.S. economy is not ready to take off.
Payden & Rygel's portfolio is managed against the Lehman Brothers Aggregate Bond Index and is currently duration neutral in relation to the benchmark. Weiner said he is 5% overweight in corporates, neutral in Treasuries, 5% underweight in agencies and neutral in mortgage-backed securities. The shift toward longer duration will not affect the firm's allocation to Treasuries. Within corporates, Weiner prefers high-beta credits such as autos and telecom. The portfolio is overweight in triple-B securities. The firm will remain neutral in mortgages,Weiner said, adding he is overweight in high-coupon high-yielding MBS. He holds Fannie 6% 15-year mortgages.