Securities Sponsored By the United States Government

On the daily press you can find the quotations of most of the debt securities issued by the United States government or by governmental and par governmental organisms. However, some newspapers publish this information only once a week. The lists are of two types: One that comprehends the issued securities of the United States government and another that embraces, a long with a great variety of other securities are listed is that of the date of expiration, for example in 1/32% of the value equal to the emission. There are also the variations of the offered price. These figured are also expressed in 1/32%. The figures in the column of “return” don’t reflect the current returns, but the returns at expiration return are based in the quotations of the “demand”. The expiration return is a more significant figure for the sight of great investors, for whom these securities are more attractive.

The securities sponsored by the government and the securities of Federal Organism usually offer a rate of profitability slightly higher than those of the securities issued by the treasury. In spite of these circumstances, the investors less appreciate the first, because they are not as secure or as liquid as the second.

What are then these securities issued by the federal organisms? Of course they don’t represent, by general rule, a direct debt from the United States government, although it does imply a moral obligation and they implicitly carry a certain guarantee. The approved amount of securities are issued and paid through the Federal Reserve Bank, thus they enjoy of the federal sponsoring, although not necessarily of solid and secure guarantees.

The following are some of the most important federal organisms that emit debt securities:

  • Government National Mortgage Association (GNMA, also called “Ginnie Mae”.).
  • Federal national Mortgage Association (FNMA, also called “Fannie Mae”).
  • Federal Home Loan Banks (FHLB, also called “Freddie Mac”).
  • U.S. Postal Service (USPS)
  • Tennessee Valley Authority (TVA)

Is there place in the security portfolio of an individual investor for securities of federal organisms?

The answer is affirmative; due that as happens with the treasury securities, they constitute an umbrella of safety that is so necessary in every security portfolio of individual investors.

Though the Federal Government does not directly guarantee the securities of federal organisms, the truth is that they have never merit it to fail.