Other ETFs that invest in the sector include SPDR Barclays Capital Mortgage Backed Bond ETF (NYSEArca: MBG), Vanguard Mortgage-Backed Securities ETF (NYSEArca: VMBS), iShares Barclays CMBS Bond Fund (NYSEArca: CMBS) and iShares Barclays GNMA Bond Fund (NYSEArca: GNMA).
The Fed’s expanded bond buying amounts to “unprecedented support” of the mortgage market, said Todd Abraham, co-head of government and mortgage bonds at Federated Investors, in a Dow Jones Newswires report. [PIMCO ETF ‘Well Positioned’ for Fed’s Mortgage Buying]
“But some market strategists doubt MBS ETFs have much upside potential and say the Fed’s impact will be marginal,” Investors’ Business Daily reported.
“The mortgage-related portion of the U.S Investment Grade Bond Index is just over $8.0 trillion,” said Wayne Schmidt, chief investment officer at Gradient Investments, in the story. “The Fed program is targeting 0.5% of the total pool of agency mortgage-backed securities. If the program continued for one year, their purchases would equate to about 6% of the total market.”
iShares Barclays MBS Bond Fund
