Got an email teaser from Daily Wealth about what this guy calls F series bonds. I have tried to google the clues, but could not sleuth it out. Anyone out there get the email and have an answer for us?

Here is the teaser:

Fifteen years ago, Michael Finnegan had a boring bank job.

He earned a decent salary, but was by no means rich. So he hopped from one bank to another looking for opportunities.

And then, one day, while working in the "fixed-income" department, Finnegan stumbled upon the moneymaking secret of a lifetime...

A glaring anomaly in the bond markets, whereby an ordinary government-created bond (made possible by the U.S. Department of Housing and Urban Development) can safely yield gains of as much as 180% or more over a period of approximately 18-24 months.

Known in some circles as the "F-Series," these bonds are typically much safer than regular stocks... and much more profitable than ordinary government Treasuries.

Now, finally, the mainstream press has started to catch on as well. On May 14th, for example, Barron's wrote a 2-page article about the "F-Series."
● Forbes magazine called this investment: "a less volatile alternative to a frothy stock market, with more income than stocks offer."

● The Wall Street Journal said it, "means fat dividends... "

"F-Series" bonds, as I call them, are issued throughout the year.

But occasionally (like right now), the government helps make "F-Series" rates so favorable that they are the safest and most profitable thing you can do with your money.

What most people don't realize is that this very lucrative "bond program" can be traced all the way back to 1938


That is about the extent of it. Any help would be appreciated. However, it sounds like one of those too good to be true things.

Thanks all

Annaly (NLY), a mortgage REIT that got a lot of attention from Jim Cramer a while back, is a fine way to invest in some of these mortgage-related bonds, but it's not actually a bond. That Int'l Herald Tribune quote is about Annaly, however.

And as a mortgage REIT it does pay a nice dividend. The actual bonds that seem to be the meat of the tease here, at least in the first iteration of the "F-Series Bond" that I saw, are a pain in the neck to invest in for small investors -- these are not just the heavily traded mortgage bonds, but also the agency bonds for FNMA and Freddie and a bunch of other smaller agencies, and collateralized pass through bonds and all sorts of more engineered stuff that I don't find it worth my time to understand. This is one of those teasers, of which S&A has had a few lately, that seem to tease a strategy more than a specific investment.

On the specific clues, 1938 was the year FNMA was created by FDR, and the Forbes quote in the tease is from a very general article back in 1998 that recommended REITs (or, more specifically, REIT funds).

And I agree, it's certainly too good to be true, as are almost all ads for this stuff, which is what makes it fun. There are anomalies in the bond markets, and it's certainly possible that one led to 180% returns, but I'd be very suspicious of someone who argues that there's a clear anomaly along those same lines right now. Bonds are extraordinarily heavily traded by institutions and the trade is not very transparent, as an individual investor I would never presume to try to beat the big guys at this game.

NLY, though, I have owned in the past -- always thought it was a decent company, though I haven't looked at the financials in the last few years.

I know, that's around when I owned it and a few other mortgage REITs -- they did spectacularly well, I just don't think many folks were predicting it at the time. More to the point, I think starting from today's levels those kind of returns are virtually impossible for most REITs, interest rates are too high and may be climbing, and dividends are historically extremely low. Mostly what I meant, though, was that picking individual bonds for that kind of return is something individuals would have a really hard time doing.