Washington Mutual is in the process of reconstructing its $52 billion retained portfolio of Treasuries, agency bonds and related futures and options in favor of investing in higher-yielding spread product, specifically mortgage-backed securities, says David Sell, who recently resigned as senior portfolio manager. Sell says the decision is "understandable given the bank's sharp growth, I suppose they just want to do what they do really well, namely, MBS." Along with Sell, senior portfolio manager Sunil Chowdry and Waqar Sheikh, Sell's supervisor, also departed, all as a result of the shift in investment emphasis. Chowdry and Sheikh had left the firm and were unavailable to comment. John Dobrowolski, the head of the bank's portfolio management arm, did not return repeated phone calls seeking comment.
An individual familiar with the portfolio's performance says that the portfolio team had profits of $200 million on the portfolio last year, up from $70 million before they arrived a little over one year ago. It could not be determined how the bank would begin the reconfiguration, or what specific securities they would emphasize. A call to Kevin Horn in the bank's media relations department seeking comment on replacements for that portfolio was not returned.
Sell says that he will "probably move back east, where I'm from. From there, I'll map out a plan to get back on the Street." Prior to joining Wamu, Sell worked at Banc One Capital Markets, State Street Research and Management and PaineWebber.