Fannie Mae / Freddie Mac Preferred Shares Still Driving Top Hedge Fund

Fannie Mae Freddie MacBy User:AgnosticPreachersKid (Own work) [CC BY-SA 3.0], via Wikimedia Commons

The latest “Hedge Weekly” report was released on Wednesday, and it shows that Muirfield GSE Partners was again at the top of the list. The fund’s return as of the end of August was 70.02%. Fannie Mae and Freddie Mac preferred shares continued to climb over the last week, boosting Muirfield’s performance again.

Muirfield’s thesis for Fannie/ Freddie preferred shares

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Muirfield's thesis for Fannie Mae and Freddie Mac preferred shares is well-documented. The fund's management said earlier this year that they expected to triple their money on preferred shares of the government-sponsored enterprises. They estimated that the shares are worth $25, which still leaves plenty of room for upside if they are correct.

The overall thesis for the GSEs' preferred shares hinges on both companies exiting conservatorship and on the decision in a number of lawsuits filed over the dividends. Reputed bank analyst Dick Bove has said he believes the plaintiffs are in the right on those lawsuits, and several hedge funds have continued to bet on a positive outcome.

Analysts expect the Trump administration to unveil its plan to bring Fannie Mae and Freddie Mac out of conservatorship in the next few days. The U.S. Senate Banking Committee said earlier this week that it has planned a hearing on the matter for Sept. 10, and analysts widely saw that as a sign that the report would arrive by Friday.

Other top and bottom funds

After Muirfield's Fannie Mae and Freddie Mac preferred shares boost, the other top 10 funds according to "Hedge Weekly" are:

  1. Quantedge Global
  2. Lynx Bermuda
  3. Cantab Capital Partners Quantitative Fund
  4. Pershing Square Intl
  5. BCM Weston
  6. Golden China Fund
  7. Graham Global Investment Fund
  8. Lucerne Capital
  9. Pelham Global

The bottom 10 funds over the last week are, from the lowest up:

  1. Finisterre Global Opportunity Fund
  2. Odey European
  3. Bluemountain Credit Alternatives Fund
  4. Cassiopeia Fund
  5. PIMCO Global Credit Opportunity Fund
  6. MLM Macro Peak Partnersr Offsh
  7. Westfield Fund
  8. IPM Systematic Macro Fund
  9. Cassiopeia UCITS Fund
  10. Numen Credit Opportunities

This article first appeared on ValueWalk Premium

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About the Author

Michelle Jones
Michelle Jones was a television news producer for eight years. She produced the morning news programs for the NBC affiliates in Evansville, Indiana and Huntsville, Alabama and spent a short time at the CBS affiliate in Huntsville. She has experience as a writer and public relations expert for a wide variety of businesses. Michelle has been with ValueWalk since 2012 and is now our editor-in-chief. Email her at [email protected]

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