Foreign Holdings of MGS: Estimate of Foreign Share by Tenor

·         We estimate that foreign investors held a 61% share of outstanding MGS in < 3y sector, 50% in 3-5y sector, 53% in 5-10y sector, 19% in 10-15y sector and 14% in >15y sector.

·         While foreign participation concentrated in front to belly part of the curve, foreign composition was primarily real-money with a strong of presence of long-term type of investors.

·         Pre-QE Taper in 2013, the foreign share of MGS rose most in the front and belly sectors, but post-QE Taper there seemed to be a healthier balance with steadily growing foreign share of MGS in the belly and longer-end sectors.