Street analysts are noting the attractiveness of the 20-year sector that results from rolls currently trading near carry and some of the recent cheapening. In a recent report from Bear Stearns, analysts state that the ability to buy cheaper cashflows off 20-year collateral should be especially appealing to total return accounts and indexed benchmarked portfolios.

In the report, analysts pointed out that less liquid sectors that have languished due to the TBA roll bid - such as 20-year product - are expected to outperform as rolls remain weak, even though these have not seen a better bid. "With prepayment speeds on top of 15-year collateral and prices well behind, 20-year collateral is offering attractive relative value," wrote analysts.

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